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Please help!! This is for ECONOMICS not social studies it just didn't have that option.
Jack’s Lock and Key are considering remodeling. It estimates that the remodeling will cost $6,000 and that as a result revenues will rise by $3,000 the first year, $2,500 the second year, $1,500 the third year, and have no effect after then. If the interest rate is 5%, should Jack’s remodel? Defend your answer by showing your work.

Sagot :

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Answer:

Explanation: Jack's should remodel. The present value of revenues from the remodeling exceeds the cost.

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