Winston Enterprises Would Like to Buy Some Additional Land and Build

question 59

Multiple Choice

Winston Enterprises would like to buy some additional land and build a new factory.The anticipated total cost is £136 million.The owner of the firm is quite conservative and will only do this when the company has sufficient funds to pay cash for the entire expansion project.Management has decided to save £450,000 a month for this purpose.The firm earns 6% compounded monthly on the funds it saves.How long does the company have to wait before expanding its operations?

• A)184.61 months
• B)199.97 months
• C)234.34 months
• D)284.61 months
• E)299.97 months

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Definitions:

Wage

Compensation for labor services, typically expressed on an hourly, daily, or piecework basis.

Rental Price

The amount of money charged for the temporary use of a good, service, or property.

Services from Land

The benefits and outputs produced by natural resources without altering their original physical state, such as agricultural production, mining, and scenic views.

Ownership

Refers to the rights that confirm the legal possession and control over property, assets, or resources.