Your sister wants to open a store that sells antique-style jewelry and accessories. She has $15,000 of

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Your sister wants to open a store that sells antique-style jewelry and accessories. She has $15,000 of savings to invest, but opening the store will require an initial investment of $20,000. Net cash inflows will be −$2,000, −$1,000, and $0 in the first three months. As the store becomes better known, net cash inflows will become +$500 in the fourth month and grow at a constant rate of 5 percent in the following months. You want to help your sister by providing the additional money that she needs. How much money do you have to invest each month to start and to keep the store operating with a minimum cash balance of $1,000?
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Fundamentals of Corporate Finance

ISBN: 978-1118845899

3rd edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

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