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Total $50 000.00 4.49 Coastal Shipping is setting aside capital to fund an expansion project. Funds earmarked for the project will accumulate at the rate
Total $50 000.00 4.49 Coastal Shipping is setting aside capital to fund an expansion project. Funds earmarked for the project will accumulate at the rate of $50 000 per month until the project is completed in two years. Once the project starts, costs will be incurred at a rate of $150 000 per month over 24 months. Coastal currently has $250 000 saved. What is the minimum number of months it will have to wait before it can start if money is worth 18 percent nominal, com- pounded monthly? Assume that: 1. Cash flows are all at the ends of months. 2. The first $50 000 savings occurs one month from today. 3. The first $150 000 payment occurs one month after the start of the project. 4. The project must start at the beginning of a month. 4 50 A company is about to invest in a joint venture research and development proiect with
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