EXERCISE 13A–1 Basic Present Value Concepts [LO7]
Largo Freightlines plans to build a new garage in three 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:
a. Eight percent.
b. Twelve percent.
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