Largo Freightlines plans to build a new garage in three (3) years to have more space for repairing its trucks. The garage will cost $400,000. What lump- sum amount should the company invest now to have the $400,000 available at the end of the three-year period? Assume that the company can invest money at eight percent.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 13EB: Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for...
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Largo Freightlines plans to build a new garage in
three (3) years to have more space for repairing its
trucks. The garage will cost $400,000. What lump-
sum amount should the company invest now to have
the $400,000 available at the end of the three-year
period? Assume that the company can invest money
at eight percent.
Transcribed Image Text:Largo Freightlines plans to build a new garage in three (3) years to have more space for repairing its trucks. The garage will cost $400,000. What lump- sum amount should the company invest now to have the $400,000 available at the end of the three-year period? Assume that the company can invest money at eight percent.
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