A company makes fixed annual payments to a sinking fund to replace equipment in five years' time for its new project. The equipment is valued at £100,000 and interest rates are 12%. How much should each payment be? How would these payments change if the company could put an initial £10,000 into the fund?

A company makes fixed annual payments to a sinking fund to replace equipment in five years' time for its new project. The equipment is valued at £100,000 and interest rates are 12%. How much should each payment be? How would these payments change if the company could put an initial £10,000 into the fund?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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