A construction management company is examining its cash flow requirements for the next 7 years. The company expects to replace software and in-field computing equipment at various times over a 7year planning period. Specifically, the company expects to spend $6000 one year from now, $9000 three years from now, and $10,000 each year in years 6 through 10. What is the future worth in year 10 of the planned expenditures, at an interest rate of 12% per year?
What will be an ideal response?
F = 6000(F/P,12%,9) + 9000(F/P,12%,7) + 10,000(F/A,12%,5)
= 6000(2.7731) + 9000(2.2107) + 10,000(6.3528)
= $100,063
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