In Class work examples
A medium-size consulting engineering
firm is trying to decide whether it should
remodel its office now or wait and do it
one year from now. If the firm does it
now, the cost will be $38,000. The
interest rate is 10 % per year.
a. What would the cost have to be one
year from now to render the decision
indifferent?
b. If the cost one year from now is
$41,600, should the firm remodel now
or later?
How many years does it take for an investment of
$280,000 to accumulate to at least
$425,000 at 15% per year interest?
A sum of $2 million now is equivalent to
$2.36 million one year from now at what
interest rate?
