i = 3%

QUESTION 1: (CLO1) (6 Marks) Fahed is the on-site coordinating engineer for Alcoa Aluminum, where an under renovation mine has new ore refining equipment being installed by a local contractor. Fahed developed the cash flow diagram in Figure below in $1000 units from the project perspective. Included are payments to the contractor he has authorized for the current year and approved advances from Alcoa's home office. He knows that the interest rate on equipment "field projects" such as this is i% per year compounded Semiannually, and that Alcoa does not bother with interperiod compounding of interest. Will Fahed's project finances be in the "red" or the "black" at the end of the year? By how much? (Draw the Moved cash flow diagram) Receipts from home office $120 S120 Year 1 2 3 Month 5 6 7 8 9 11 12 10 $50 $75 $100 $150 Payments to contractor $200 $200 QUESTION 1: (CLO1) (6 Marks) Fahed is the on-site coordinating engineer for Alcoa Aluminum, where an under renovation mine has new ore refining equipment being installed by a local contractor. Fahed developed the cash flow diagram in Figure below in $1000 units from the project perspective. Included are payments to the contractor he has authorized for the current year and approved advances from Alcoa's home office. He knows that the interest rate on equipment "field projects" such as this is i% per year compounded Semiannually, and that Alcoa does not bother with interperiod compounding of interest. Will Fahed's project finances be in the "red" or the "black" at the end of the year? By how much? (Draw the Moved cash flow diagram) Receipts from home office $120 S120 Year 1 2 3 Month 5 6 7 8 9 11 12 10 $50 $75 $100 $150 Payments to contractor $200 $200