Here, Dr. Reeves is contemplating two setups for the alligator farm he will soon start. In the feedlot option, he would buy young alligators and raise them to adulthood and sell them. In the Integrated Operation option he would breed his own alligators and raise alligators from eggs to adulthood. Using a table of the anticipated costs and revenues and when they occur, it is determined which operation yields higher overall present value. Among the techniques demonstrated is the two step process of first lumping a uniform series of cash flows (P given A), then finding an equivalent present value with the compounding interest formula (P given F).
This lecture segment was recorded on April 24, 2018. All retainable rights are claimed by Michael Swanbom.
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Негізгі бет Dr. Reeves, Alligator Farmer | Choosing Between Complex Opportunities Based on Present Value
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