Question

Fraser Company will need a new warehouse in eight years. The warehouse will cost $440,000 to build Use Excel or a financial calculator to solve. Round answers to the nearest dollar Required: 1. What lumpsum amount should the company invest now to have the $440.000 available at the end of the eight-year period? Assume that the company can invest money at twelve percent Amount to be Invested 2. What lump-sum amount should the company invest now to have the $440.000 available at the end of the eight-year period? Assume that the company can invest money at eight percent Amount to be Invested

Answer 1

rate positively ..

Ans 1)	Amount invested is the present value of the lumpsum amount
	Present vlaue =	44000/(1+12%)^8
		17,770.86
	ans =	$                   17,770.86
Ans 1)	Amount invested is the present value of the lumpsum amount
	Present vlaue =	44000/(1+8%)^8
		23,771.83
	ans =	$                   23,771.83