A construction company has a bank account fund with a net value of $2,500,000. The company plans to withdrawal rate is $165,000 per year starting 1 year from now. How many years will it take to completely deplete the fund if the conservatively managed fund grows at a rate of 4.5 % per year? a. Draw the cash flow diagram from the bank's perspective b. Calculate the number of years to deplete the funds.
A construction company has a bank account fund with a net value of $2,500,000. The company plans to withdrawal rate is $165,000 per year starting 1 year from now. How many years will it take to completely deplete the fund if the conservatively managed fund grows at a rate of 4.5 % per year? a. Draw the cash flow diagram from the bank's perspective b. Calculate the number of years to deplete the funds.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A construction company has a bank account fund with a net value of $2,500,000. The company plans to withdrawal rate is $165,000 per year starting 1 year from now. How many years will it take to completely deplete the fund if the conservatively managed fund grows at a rate of 4.5 % per year?
a. Draw the cash flow diagram from the bank's perspective
b. Calculate the number of years to deplete the funds.
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