An indium-gallium-arsenide-nitrogen alloy developed at Sandia National Laboratory is said to have potential uses in electricity-generating solar cells. The new material is expected to have a longer life, and it is believed to have a 40% efficiency rate, which is nearly twice that of standard silicon solar cells. The useful life of a telecommunications satellite could be extended from 10 to 15 years by using the new solar cells. What rate of return could be realized if an extra investment now of $890,000 would result in extra revenues of $450,000 in year 11, $500,000 in year 12, and amounts increasing by $50,000 per year through year 15

Question

Guest

16 December, 00:39

+4

Answers (1)

Know the Answer?

Cullen Ayala · Answer 1

-890,000 = 450,000 / (1+r) + 500,000 / (1+r) ^2 + 550,000 / (1+r) ^3 + 600,000 / (1+r) ^4 + 650,000 / (1+r) ^5

r = 9%