Question

The City of San Antonio is considering various options for providing water in its 50-year plan, including desalting. One brackish aquifer is expected to yield desalted water that will generate revenue of $4.1 million per year for the first 5 years, after which less production will decrease revenue by 10% per year each year. If the aquifer will be totally depleted in 21 years, what is the present worth of the desalting option revenue at an interest rate of 9% per year

Answer 1

Answer:

$27,980,812

Explanation:

The computation of the present worth at the interest rate of 9% for the 21 years is to be shown on the excel spreadsheet.

There are two sheets attached one is of final values, and the other one is a formula sheet in which all formulas are to be shown so that it is easy to reach to the final answer

Therefore after applying the formulas, the present value would be $27,980,812