Top shelf industries is considering remodeling a building that it leases to a retail store. the remodeling costs are estimated at $2.15 million. if it proceeds with the remodeling, the tenant has agreed to pay an additional $750,000 a year in rent for the next 4 years. the discount rate is 13 percent. what is the benefit of the remodeling project to top shelf industries

$80,875

Explanation:

The computation of the net present value or net benefit is shown below:

= Present value of all yearly cash inflows after applying discount factor - initial investment

where,

The Present value would be

= Additional amount × PVIFA for 4 years at 13%

= $750,000 × 2.9745

= $2,230,875

Refer to the PVIFA table

And, the initial investment is $2,150,000

Now put these values to the above formula  

So, the value would equal to

= $2,230,875 - $2,150,000

= $80,875

answer may be d i think

hi : ) i found this so i hope this !

"we first find value of tax in dollars.

the difference between the two prices   is: 23. 54 - 22 = 1.54

therefore the sales tax in dollars is 1.54

the tax % will be   (amount of tax / original cost price ) × 100

(1.54 / 22) × 100  → (0.07) × 100 =   7

so the tax rate is 7%

we can double check the answer.

7 % of 22   → (7/100) × 22 → 0.07 × 22 = 1.54

22 + 1.54 = 23.54"