Saved Help Save & Exit Submit Check my work The optical products division of Pan

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Saved Help Save & Exit Submit Check my work The optical products division of Panasonic is planning a $3.5 million building expansion for manufacturing its powerful Lumix DMC digital zoom camera. If the company uses an interest rate of 16% per year, compounded monthly for all new investments, what is the uniform amount per quarter the company must make in order to recover its investment in 6 years? The uniform amount per quarter that the company must make in order to recover its investment in 6 years is e here to search

Explanation / Answer

Initial Investment 3500000 Annual rate of interest 16% Monthly rate (16/12) 1.33% Compounding quarterly 4.04% (100+1.33%)*3times -100 Annuity factor for 24 periods 15.1847 Annual cash inflows 230495.2 Therefore, Unform amount each quarter is $ 230495

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