Winston Enterprises Would Like to Buy Some Additional Land and Build

question 81

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:

Action Calendar

A tool or system used for scheduling tasks, goals, and actions to enhance personal or organizational productivity.

Offer Price

The price at which an entity is willing to sell shares or securities to potential buyers.

Venture Capitalist

An investor who provides capital to startup companies and small businesses with perceived long-term growth potential in exchange for an equity stake.

Lifecycle

The series of changes in the life of an organism, product, or system from its beginning to its end.