A 24- Hour Music Network Plans to Add Satellite Technology

Short Answer

A 24- hour music network plans to add satellite technology to allow its expansion into other major southern markets. The network expects the monthly revenue to increase by
$380,000 from new cable subscription fees. The satellite will require an initial cost of $2 million with monthly operating and maintenance costs of $340,000. It will have a $122,000 salvage value after 6 years. Calculate the net present worth of this investment at an interest rate of 4% per year, compounded continuously.