Time value of money, Finance Basics

One of the projects the US loan would fund is to build earthquake-resistant buildings. The project will begin in March 2013, last for two years and is expected to have the following expenditures: start-up costs of $200,000 paid at the beginning of the first month; rental of equipment to be paid at the beginning of the month that will be $100,000 each month for the first year, but $50,000 each month for the second year;

material costs to be paid at the end of each month that will be $30,000; personnel costs of

$100,000 to be paid at the end of each month; and end-of-project clean-up costs of

$100,000 that will be paid at the end of the last month (February 2015). Suppose that with the fiscal cliff looming in March 2013, Secretary Kerry is only willing to allocate

$3,000,000 of the US loan at the start of the project due to this concern. These funds are put into an account that pays interest at a stated annual rate of 12 percent, compounded monthly. Calculate how much this project needs at the beginning of the second year that would be necessary to cover its expected expenditures.
Posted Date: 2/21/2013 5:38:14 PM | Location : Canada







Related Discussions:- Time value of money, Assignment Help, Ask Question on Time value of money, Get Answer, Expert's Help, Time value of money Discussions

Write discussion on Time value of money
Your posts are moderated
Related Questions
Tax Differential Theory Advanced via Lichtenberger and Ramaswamy in 1979.They argued that tax rate on dividends is higher quite than tax rate on capital gains. Thus, a firm th

Liquidity Ratios - Ratio Analysis It also identified as working capital ratios.  They show capability of the firm to meet its short term maturing financial obligation/recent l

Explain the method of Offer of Sale Method of offer of sale consists in outright sale of securities through intermediary of issue houses or share brokers. In other words, sh

Which of the following is true with regards to rising interest rates. A. Use long-term loans to take advantage of current low rates. B. The term of the loan is ot impacted by risin

Quetion1: You are earning 5.2 percent on a certificate of deposit. Inflation is running 3.5 percent. What is the real rate of return on your investment? Question2: Search for

What are the main functions of the financial systems? The main functions of financial systems in short are as follows: a. Give the mechanisms by that funds can be transferre

Important points for Working Capital Cycle A lengthy working capital cycle is a sign of poor management of debtors and stock reflecting low turnover of debtors and stock and l

Importance and Solution of Dividend Decisions Dividends decisions are integral part of a firm's strategic financing decision. It is hence a plan of action adopted by managemen

Why do several critics say the CAPM model is not suitable in an international setting? Please describe a way that the CAPM model could be adapted for international applications.

In order to value a debt security correctly, we must understand the terms and conditions of debt securities precisely. These terms define the contractual rights of the debt securit