You are the finance manager for a particular company. The company plans to purchase $3,000,000 in new assembly line machinery in 5 years. (Use Table 11-1 and Table 11-2. Round your answers to the nearest cent.) (a) How much (in $) must be set aside now at 8% interest compounded semiannually to accumulate the $3,000,000 in 5 years? 2$ (b) If the inflation rate on this type of equipment is 7% per year, what will be the cost (in $) of the equipment in 5 years, adjusted for inflation? 2$ (c) Use the inflation-adjusted cost of the equipment to calculate how much (in $) must be set aside now. $
You are the finance manager for a particular company. The company plans to purchase $3,000,000 in new assembly line machinery in 5 years. (Use Table 11-1 and Table 11-2. Round your answers to the nearest cent.) (a) How much (in $) must be set aside now at 8% interest compounded semiannually to accumulate the $3,000,000 in 5 years? 2$ (b) If the inflation rate on this type of equipment is 7% per year, what will be the cost (in $) of the equipment in 5 years, adjusted for inflation? 2$ (c) Use the inflation-adjusted cost of the equipment to calculate how much (in $) must be set aside now. $
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 34P
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