Fraser Company will need a new warehouse in eight years. The warehouse will cost

Question

Fraser Company will need a new warehouse in eight years. The warehouse will cost $430,000 to build. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables Required What lump-sum amount should the company invest now to have the $430,000 available at the end of the eight-year period? Assume that the company can invest money at: (Round your final answer to the nearest whole dollar amount.) e company canimestompay n ae now ts hve the sa Present Value 1. Four percent 2. Eight percent

Explanation / Answer

Calculate lump sum invest :

1) Four percent = 430000*0.731 = 314330

2) Eight percent = 430000*0.540 = 232200

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