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Fraser Company will need a new warehouse in four years. The warehouse will cost $350,000 to build. Click here to view Exhibit 11B-1 and Exhibit
Fraser Company will need a new warehouse in four years. The warehouse will cost $350,000 to build. Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. Required: 1. What lump-sum amount should the company invest now to have the $350,000 available at the end of the four-year period? Assume that the company can invest money at five percent. (Use the appropriate table to determine the discount factor(s).) Amount to be Invested Discount Factor = Investment Present Value 2. What lump-sum amount should the company invest now to have the $350,000 available at the end of the four-year period? Assume that the company can invest money at eleven percent. (Use the appropriate table to determine the discount factor(s).) Amount to be Invested * Discount Factor - Investment Present Value
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