1. A manufacturing firm is planning to set aside $250,000 now for possibly replacing part of...

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Answer 1

Answer #1

Quarterly interest rate = 8%/4 = 2%

Number of compounding periods = 4 x 11 = 44

Future value ($) = Present value x F/P(2%, 44) = 250,000 x (1.02)⁴⁴ = 250,000 x 2.3901 = 597,525

Answer 2

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