Your company is planning fund the installation of a new process line by cutting the current...
Your company is planning fund the installation of a new process line by cutting the current operating budget and depositing the savings into an account with an annual interest rate of 1.2% compounded daily. If the new process line will cost $1,750,000 one year from today, then by what amount must the current operating budget be reduced?
Homework Answers
i=1.2% compounded daily
Effective rate = (1+1.2/100*365)365-1
i=0.012072089
P=1750000/(1+i)
=1750000/(1.012072089)
=1729125
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