Explore BrainMass

Decreasing Geometric Gradient

Decreasing Geometric Gradient
My book does not explain well the formula for a Decreasing Geometric Gradient. For example: if I have an initial cost of 4 million and a yearly decreasing cost of 25% per year through year 5, what would be the equivalent PV and Annual Cost?

Solution Summary

The solution illustrates decreasing geometric gradient through an example.