XXXX Contractors are preparing to replace critical earthmoving plants and equipment so that they can consolidate future
Posted: Tue Apr 26, 2022 10:31 am
XXXX Contractors are preparing to replace critical earthmoving
plants and equipment so that they can consolidate future bids. The
anticipated cost of the digger with a maximum-sized bucket is
£85,000. It needs to be bought in 4 years’ time. However, the
industrial development fund is willing to loan XXXX contractors at
a rate of 12% per annum if they can purchase the digger today. The
accountant thinks there is a possibility of outright purchase of
the digger in 4 years’ time if the company can create a sinking
fund at a rate of 6% per annum
Task: Calculate the amount of money XXXX Contractors should
reserve (sinking fund) per year for it to make an outright
purchase, as proposed by the accountant
plants and equipment so that they can consolidate future bids. The
anticipated cost of the digger with a maximum-sized bucket is
£85,000. It needs to be bought in 4 years’ time. However, the
industrial development fund is willing to loan XXXX contractors at
a rate of 12% per annum if they can purchase the digger today. The
accountant thinks there is a possibility of outright purchase of
the digger in 4 years’ time if the company can create a sinking
fund at a rate of 6% per annum
Task: Calculate the amount of money XXXX Contractors should
reserve (sinking fund) per year for it to make an outright
purchase, as proposed by the accountant