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The head of a department wishes to create a sinking fund to replace old equipment used by his/her department. He/she has estimated that it will cost R3 679 253,60 to replace the equipment in three years' time. Given: • The estimated return for the next three years is 6 %. Compounding is done monthly. The estimated salvage value of old equinment in three veare time je DRO000

The head of a department wishes to create a sinking fund to replace old equipment used by his/her department. He/she has estimated that it will cost R3 679 253,60 to replace the equipment in three years' time. Given: • The estimated return for the next three years is 6 %. Compounding is done monthly. The estimated salvage value of old equinment in three veare time je DRO000

Essentials Of Investments
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
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Question 4 4.1. The head of a department wishes to create a sinking fund to replace old equipment used by his/her department. He/she has estimated that it will cost R3 679 253,60 to replace the equipment in three years' time. Given: • The estimated return for the next three years is 6 %. • Compounding is done monthly. • The estimated salvage value of old equipment in three years' time is R80000. What amount must be set aside monthly to make the purchase of the equipment possible
Transcribed Image Text:Question 4 4.1. The head of a department wishes to create a sinking fund to replace old equipment used by his/her department. He/she has estimated that it will cost R3 679 253,60 to replace the equipment in three years' time. Given: • The estimated return for the next three years is 6 %. • Compounding is done monthly. • The estimated salvage value of old equipment in three years' time is R80000. What amount must be set aside monthly to make the purchase of the equipment possible
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