1. The expansion plan of the business firm requires the purchase of a parcel of land on which to build a structure, which they need 5 years hence. The current cost are: land = P1M and building = P2M. Since these are not needed immediately, the firm plans to defer the purchase and the construction until they are needed. If the value of the land and building cost are expected to appreciate at the rates of 18% and 15% respectively compounded semi annually, what will the total cost after 5 years. 2. Quarterly deposits were made earning 20% compounded quarterly. The 1st deposit was P10k & each deposit thereafter was 5k greater than the previous. Determine the amount in the fund after 1 year of quarter deposit.
1. The expansion plan of the business firm requires the purchase of a parcel of land on which to build a structure, which they need 5 years hence. The current cost are: land = P1M and building = P2M. Since these are not needed immediately, the firm plans to defer the purchase and the construction until they are needed. If the value of the land and building cost are expected to appreciate at the rates of 18% and 15% respectively compounded semi annually, what will the total cost after 5 years. 2. Quarterly deposits were made earning 20% compounded quarterly. The 1st deposit was P10k & each deposit thereafter was 5k greater than the previous. Determine the amount in the fund after 1 year of quarter deposit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. The expansion plan of the business firm requires the purchase of a parcel of land on which to build a structure, which they need 5 years hence. The current cost are: land = P1M and building = P2M. Since these are not needed immediately, the firm plans to defer the purchase and the construction until they are needed. If the value of the land and building cost are expected to appreciate at the rates of 18% and 15% respectively compounded semi annually, what will the total cost after 5 years.
2. Quarterly deposits were made earning 20% compounded quarterly. The 1st deposit was P10k & each deposit thereafter was 5k greater than the previous. Determine the amount in the fund after 1 year of quarter deposit.
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