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Creating Fund For Buying New Equipment

Question

You are the financial manager of Wal-Mart who will submit a report on this year’s (2013) financial transactions to the company’s CFO Charles Holley. You want to verify that the following estimates prepared by your staff are correct.  

Your department will set aside a lump sum fund this year in order to pay for a planned purchase of a $140,000-equipment in 2020. How much should be deposited this year to pay for this purchase if the current market interest rate is 3.50 percent on an annual basis?
Staff Estimate: $80,000 (please verify)

Summary

The question belongs to Finance and it is about a scenario of Wal-Mart has been given. The financial manager of Wal-Mart has to submit a report on the year’s financial transaction of the company. One of the departments wants to set aside a lump-sum amount to pay for equipment in 2020. The year’s amount to be set aside needs to be calculated.

Total Word Count 34

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