Homework Answers
Capitalized cost of the program = present value of all the costs
= 5000 x (P/A, 2.5%, 10) + 8000 x ((P/A, 2.5%, 16) - (P/A, 2.5%, 10) + 10000/2.5%
= 5000 x (8.7521) x 8000 x (13.0550 - 8.7521) + 10000/2.5%
= $478,183
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following cash contributions– an initial (t=0) contribution now
followed by 5 annual (t=1 through t=5) contributions. She just
contributed $50,000. She plans to make 5 equal annual contributions
starting one year from now. If the fund is expected to earn 10% per
year compounded annually, determine the...
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