Determine the withdrawals in years

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Reference no: EM133366726

Question: The WMHX (We Make Heat Exchangers) company has created an investment plan to fund the next generation heat exchanger they plan to develop. The plan calls for an initial investment of $7 million, decreasing by $1 million per year through year 5. During years 6 through 10, no deposits or withdrawals will be made. At the end of year 10, $20 million will be withdrawn to initially fund the development program. Subsequent withdrawals will decrease uniformly each year thereafter through year 15. An investment opportunity has been identified that will return 10% per year, compounded monthly. Determine the withdrawals in years 11-15 that will completely exhaust the funds by the end of year 15.

Reference no: EM133366726

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