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3. [3 points) Star Labs, a growing research facility, wishes to set aside money to meet the anticipated future expenses for capital investments and equipment

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3. [3 points) Star Labs, a growing research facility, wishes to set aside money to meet the anticipated future expenses for capital investments and equipment maintenance for the next 12 years. The lab wants to set up a mutual fund (from which they can withdraw money at ease) to cover these expenses (as shown in the table). Their financial consultant has predicted they will receive variable interest on the amounts invested (as shown in the table). 12 400 n 0 1 2 3 4 5 6 7 8 9 10 11 Capital Investments 400 ($ per year) Maintenance Expenses 50 800 600 250 500 ($ per year) Interest rate 5% 5% 5% 6% 6% 6% 7% 7% 7% 8% 8% (per year) Note: All monetary figures in the table are in thousands of dollars ($50 = $50,000) 200 750 750 8% a. [1 point) Draw the net cash flow diagram for this problem, recognizing all known and unknown variables, and include all relevant interest periods. b. (2 points) Find the amount that needs to set aside today by Star Labs that will cover today's (year O) and all future expenses. 3. [3 points) Star Labs, a growing research facility, wishes to set aside money to meet the anticipated future expenses for capital investments and equipment maintenance for the next 12 years. The lab wants to set up a mutual fund (from which they can withdraw money at ease) to cover these expenses (as shown in the table). Their financial consultant has predicted they will receive variable interest on the amounts invested (as shown in the table). 12 400 n 0 1 2 3 4 5 6 7 8 9 10 11 Capital Investments 400 ($ per year) Maintenance Expenses 50 800 600 250 500 ($ per year) Interest rate 5% 5% 5% 6% 6% 6% 7% 7% 7% 8% 8% (per year) Note: All monetary figures in the table are in thousands of dollars ($50 = $50,000) 200 750 750 8% a. [1 point) Draw the net cash flow diagram for this problem, recognizing all known and unknown variables, and include all relevant interest periods. b. (2 points) Find the amount that needs to set aside today by Star Labs that will cover today's (year O) and all future expenses

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