Question
solve all the following questions: 1- A business decides to invest in developing a new product which will cost a total of $8.4 million over
solve all the following questions:
1- A business decides to invest in developing a new product which will cost a total of $8.4 million over 2 years but distributed in 24 equal payments on a monthly basis. If alternative investments of the same value money could earn 3% interest monthly, what is the effective cost of the product development to the stockholders of the business?
2- A business decides to invest a total of $24. million in a product development that takes a total of 2 years. The development will be financed in monthly installments of $100,000. During this period the business also has alternate investment opportunities that earn 2% interest compounded monthly. What is the true cost of the product development to the business at the end of the development period?
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