A bio research company wants to start a major project in eight years time using internal staff and expertise. They have decided to deposit a sum of $24,000 bi-annually into a high yielding fund that offers a nominal annual interest of 5% per annum compounded monthly. In addition to the regular savings, a lump sum of $40,000 will be deposited at the end of each year for the first 5 years. a) Draw the cash flow diagram applicable to the above situation. [3 Marks] b) What will be the future balance in eight years time, before the project starts? [16 Marks] c) What is the value of the balance in today's dollars? [3 Marks] d) How can the company organize its workforce and what should they do so that they will be ready to make a full start with the project when the time comes? [3 Marks]

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