Thompson Mechanical Products is planning to set aside $150,000 now for possible replacement of large synchronous refiner motors when it becomes necessary. If the replacement isn't needed for 5 years, how much will the company have in its investment set-aside account? Assume a rate of re- turn of 18% per year.
Thompson Mechanical Products is planning to set aside $150,000 now for possible replacement of large synchronous refiner motors when it becomes necessary. If the replacement isn't needed for 5 years, how much will the company have in its investment set-aside account? Assume a rate of re- turn of 18% per year.
Chapter10: Project Cash Flows And Risk
Section: Chapter Questions
Problem 12PROB
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Transcribed Image Text:2.11) Thompson Mechanical Products is planning to set
aside $150,000 now for possible replacement of
large synchronous refiner motors when it becomes
necessary. If the replacement isn't needed for
not 5 years, how much will the company have in its
investment set-aside account? Assume a rate of re-
turn of 18% per year.
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