How many cars should the trustees plan to purchase

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Reference no: EM132164931

Question: A car company has decided to spend $150,000,000 on a museum for exhibiting its classic cars. Land can be purchased for $500,000. The museum building will require 30,000 square feet of general space, while each car displayed will require an additional 1000 square feet. The design and planning process will cost $100,000, which should be paid immediately. The construction of the building will cost $600 per square foot, and the building will be completed within the next 2 years, while the cost of construction will be distributed evenly between the 2 years of construction. All cars will be purchased during the second year of construction at an average cost of $120,000 per car. The annual operation of the museum will cost $2,000,000 plus $30,000 per car. If the funds are invested at 9% per year and the museum is to exist forever, how many cars should the trustees plan to purchase?

Reference no: EM132164931

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