Willing to sponsor your new fleet of bikes

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Reference no: EM131819297

You found a company that might be willing to sponsor your new fleet of bikes. They have asked you to send them a proposal. You’ll still purchase the 35 new bikes 5 years from now, so the one-time sponsorship check (that you will receive immediately if they accept your proposal) can be invested at 6% until the purchase will be made. For what amount should you request in the proposal so that you can purchase the bikes in 5 years?

Your Excel file should depict the following (as always, show your work):

The amount that you will need in 5 years (F; which is cost of bikes x number of bikes you’ll need...same as above)

Interest rate (i)

Term (n, expressed in years)

TB (which you will find in Table B in Brayley & McLean p. 66)

The present value (P)- the amount you need to invest now to have enough to buy your bikes in 5 years.

Reference no: EM131819297

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