--%>

Problems under Time Value of Money

One of the projects the US loan would fund is to build earthquake-resistant buildings. The projectwill begin in March 2013, last for two years and is expected to have the following expenditures:start-up costs of $200,000 paid at the beginning of the first month; rental of equipment to be paidat the beginning of the month that will be $100,000 each month for the first year, but $50,000 each month for the second year;

material costs to be paid at the end of each month that will be $30,000; personnel costs of $100,000 to be paid at the end of each month; and end-of-project clean-up costs of $100,000 that will be paid at the end of the last month (February 2015). Suppose that with thefiscal cliff looming in March 2013, Secretary Kerry is only willing to allocate $3,000,000 of the US loan at the start of the project due to this concern. These funds are putinto an account that pays interest at a stated annual rate of 12 percent, compounded monthly.Calculate how much this project needs at the beginning of the second year that would benecessary to cover its expected expenditures. 

   Related Questions in Corporate Finance

  • Q : Types of Corporate Bonds What are the

    What are the various types of Corporate Bonds?

  • Q : Vanilla Bonds-Corporate Bonds Define

    Define the term Vanilla Bonds regarding Corporate Bonds?

  • Q : What are capital investment The capital

    The capital investment appraisal techniques such as NPV, IRR, ARR, PV and Time value of money have become irrelevant post Celtic Tiger. Due to the depth of the recession companies do not have budgets to invest. Discus First use this information when you are writing this essay: 1.&

  • Q : Is it correct to use valuation of

    Is this correct to use in the valuation of the shares of a certain company the “the real net assets value” which, as per to the Institute of Accounting and Auditing (ICAC), shows the “book value of shareholder’s equity, corrected through increa

  • Q : Problem on price share and stock

    Brittney and Kim Wan Sun have successfully launched a successful talent agency, ABC. They expect the firm’s earnings and dividends to grow by 20% annually for the next 10 years and they establish a strong base and to grow at a constant 5% per year thereafter. AB

  • Q : Is the given affirmation of an

    Is the given affirmation of an accountancy expert true? “There valuation criterion that reflects the value of the shares of a company in the most accurate way is based on the amount of the equity of shareholder of its balance sheet. Stating that the value of sha

  • Q : Explain Corporate Development Corporate

    Corporate Development: Corporate development is a term which references the range of planning options and strategies which can assist to move a company toward its targets. The procedure of this kind of strategic development can be exerted to just abou

  • Q : Problem on Bond Price Kevin is

    Kevin is interested in buying a 5-year bond which pays a coupon of 10 % on a semi-annual basis. The present market rate for similar bonds is 8.8 %. What must be the present price of this bond? (Round to the closest dollar.) (a) $1,048  (b) $965  (c) $1,099&n

  • Q : Briefly describe the financial services

    1 FINANCIAL SERVICES BY BANKS Financial system facilitates the transformation of savings of individuals, government as well as business into investment and consumption. It consists of

  • Q : Explain lognormal random walk based on

    Explain lognormal random walk based on Brownian motion.