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EXERCISE 14A-3 Basic Present Value Concepts LO L14-7 In three years, when he is discharged from the Air Force, Steve wants to buy an $8,000

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EXERCISE 14A-3 Basic Present Value Concepts LO L14-7 In three years, when he is discharged from the Air Force, Steve wants to buy an $8,000 power boat. Required: What lump-sum amount must Steve invest now te have the $8,000 at the end of three years if hie can invest moncy at: 1. Ten pereent? 2. Fourteen percent? EXERCISE 14A-4 Basic Present Value Concepts LO14-7 Fraser Company will need a new warehouse in five years. The warehouse will cost $500,000 to build. Required: What lump-sum amount should the company invest now to have the $500,000 available at the end of the fiveyear period? Assame that the company can invest money at: 1. Ten percent. 2. Fourteen percent. Exercise 14A-3 1. 2. Exercise 14A-4 1. 2

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