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A municipal construction project has funding requirements over the next four years of $3 million, $5 million, $8 million, and $6 million, respectively. Assume that

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A municipal construction project has funding requirements over the next four years of $3 million, $5 million, $8 million, and $6 million, respectively. Assume that all of the money for a given year is required at the beginning of the year. The city intends to sell exactly enough long-term bonds to cover the project funding requirements, and all of these bonds, regardless of when they are sold, will be paid off (mature) on the same date in a distant future year. The long term bond market interest rates for the next four years are projected to be 7.5 percent, 6 percent, 5.5 percent, and 8.5 percent, respectively. Bond interest paid will commence one year after the project is complete and will continue for 25 years, after which the bonds will be paid off. During the same period, the short-term interest rates on one year and two years time deposits are projected to be 7 percent, 6.5 percent, and 5percent, respectively for one year deposit and 12 percent and 15 percent for two year deposit. What is the city's optimal strategy for selling bonds and depositing funds in time accounts in order to complete the construction project? A municipal construction project has funding requirements over the next four years of $3 million, $5 million, $8 million, and $6 million, respectively. Assume that all of the money for a given year is required at the beginning of the year. The city intends to sell exactly enough long-term bonds to cover the project funding requirements, and all of these bonds, regardless of when they are sold, will be paid off (mature) on the same date in a distant future year. The long term bond market interest rates for the next four years are projected to be 7.5 percent, 6 percent, 5.5 percent, and 8.5 percent, respectively. Bond interest paid will commence one year after the project is complete and will continue for 25 years, after which the bonds will be paid off. During the same period, the short-term interest rates on one year and two years time deposits are projected to be 7 percent, 6.5 percent, and 5percent, respectively for one year deposit and 12 percent and 15 percent for two year deposit. What is the city's optimal strategy for selling bonds and depositing funds in time accounts in order to complete the construction project

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