Part 3. Jessica is contemplating expanding the company and must determine the capital requirements. Using...
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Accounting
Part 3. Jessica is contemplating expanding the company and must determine the capital requirements. Using the data below, determine the amount that must be placed in reserve that will provide the funds necessary at the expected time.
Jessica has calculated that she will need $2,000,000 in 5 years. There are two different investments being considered. One pays 6% APR compounded quarterly for 5 years. The other pays 25% at the end of the 5 year period.
Calculate the amount that must be invested today in each to yield the required amount and then recommend the better investment.
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