www.elsolucionario.net Solution to Case Study, Chapter 3 There are not always definitive answers to case studies. The following are examples only. Preserving Land for Public Use Cash flows for purchases at g = -25% start in year 0 at $4 million. Cash flows for parks development at G = $100,000 start in year 4 at $550,000. All cash flow signs are +. sh flo Year d Parks 0 $4,000,000 1 3,000,000 2 2,250,000 3 1,678,000 4 1,265.625 $550,000 3 949,219 650,000 6 750,000 1, Find P. In SI million units, P=4+3(P/F,7%,1) +... + 0.750(PIF,7%,6) =S13.1716 ($13,171,600) Amount to raise in years 1 and 2: A= (13.1716 ~ 3.0)(A/P,7%,2) = (10.1716)(0.55309) $5.6258 ($5,625,800 per year) 2. Find remaining project fund needs in year 3, then find the A for the next 3 years Fs = (13.1716 ~3.0)(E/P,7%,3) = $12.46019 A = 12,46019(A/P,7%3) = $4,748 (84,748,000 per year) un