Question - Each of the following parts is independent. (Ignore income taxes.) 1. 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. 2. Martell Products, Inc., can purchase a new copier that will save $5,000 per year in copying costs. The copier will last for six years and have no salvage value. What is the maximum purchase price that Martell Products would be willing to pay for the copier if the company’s required rate of return is: a. Ten percent? b. ...Read More Sixteen percent? 3. Sally has just won the million-dollar Big Slam jackpot at a gambling casino. The casino will pay her $50,000 per year for 20 years as the payoff. If Sally can invest money at a 10% rate of return, what is the present value of her winnings? Did she really win a million dollars? Explain. ...Read Less

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