Buebo is a life coaching and fitness coaching firm. They are considering an investment in...
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Buebo is a life coaching and fitness coaching firm. They are considering an investment in a customer relationship management platform. The project involves $225,000 in first costs and is expected to generate net savings (in actual dollars) of $65,000 per year over its 5-year life. They forecast
1. One of Buebo engineers came up with a new way to create self-installing hammocks. The engineer received $15,000 from Huevones for the patent. The engineer decided to invest the money in a 15-year savings certificate that pays 3.851% per semiannually period, compounded weekly. What will be the final value of the investment (FW), in terms of today's dollars (purchasing power), if inflation continues at the rate of 6% per year?
2. How much more could that engineer have if inflation was only 1%?
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