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You own a Hilton branded hotel and based on your management contract with Hilton you are required to replace Furniture, Fixtures, and Equipment (FF&E) every
You own a Hilton branded hotel and based on your management contract with Hilton you are required to replace Furniture, Fixtures, and Equipment (FF&E) every 5-years. You know that the cost to replace the FF&E in 5-years will be $3,000,000. You would like to set aside funds into a reserve account at the end of each month. If the monthly interest rate is 0.25%, how much money do you need to put away at the end of each month?
a. | $40,000 | |
b. | $46,406 | |
c. | $50,000 | |
d. | $185,627 | |
e. | $600,000 |
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