t year, n n+1 25000 24000 23000 n+2 n+3 22000 n+4 21000

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 2E
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A small business company is preparing a schedule of funds to form a sinking fund for
future expansion. The schedule of funds are as follows:
Present year, n
25000
n+1
24000
n+2
23000
22000
n+3
------
n+4
21000
------
--and so on--
By the end of the 15h year, the company will purchase an equipment needed for the
improvement and expansion of the company costing P500,000. If money is worth 16%,
how much money will be needed by the company to supplement the sinking fund?
Transcribed Image Text:A small business company is preparing a schedule of funds to form a sinking fund for future expansion. The schedule of funds are as follows: Present year, n 25000 n+1 24000 n+2 23000 22000 n+3 ------ n+4 21000 ------ --and so on-- By the end of the 15h year, the company will purchase an equipment needed for the improvement and expansion of the company costing P500,000. If money is worth 16%, how much money will be needed by the company to supplement the sinking fund?
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