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Fraser Company will need a new warehouse in seven years. The warehouse will cost $350,000 to build.   Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.   Required: What lump-sum amount should the company invest now to have the $350,000 available at the end of the seven-year period? Assume that the company can invest money at: (Round your final answer to the nearest whole dollar amount.)   Present Value 1. Ten percent   2. Seven percent

Fraser Company will need a new warehouse in seven years. The warehouse will cost $350,000 to build.   Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.   Required: What lump-sum amount should the company invest now to have the $350,000 available at the end of the seven-year period? Assume that the company can invest money at: (Round your final answer to the nearest whole dollar amount.)   Present Value 1. Ten percent   2. Seven percent

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 40P
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Fraser Company will need a new warehouse in seven years. The warehouse will cost $350,000 to build.

 

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.

 

Required:

What lump-sum amount should the company invest now to have the $350,000 available at the end of the seven-year period? Assume that the company can invest money at: (Round your final answer to the nearest whole dollar amount.)

  Present Value

1. Ten percent

  
2. Seven percent  
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