Question

SOLVE WITH EXCEL FUNCTIONS: A certain construction project, which is expected to take 3 years, will require the first month of $ 50,000 increasing at a rate of $ 5,000 per month during the first 6 months. Then, for 1.5 years, the cash requirements will increase at a rate of 12% per month, taking into account the amount required in month 6. The last 12 months, these amounts would decrease at a rate of $ 25,000 per month. Assuming that the project begins to be sold from the first month of construction, and would be sold at 100% at the end of the construction, what should be the average quarterly income to cover costs with a 24% return?

Answer 1

Months	Cost
1	50,000.00
2	55,000.00
3	60,000.00
4	65,000.00
5	70,000.00
6	75,000.00
7	84,000.00
8	94,080.00
9	105,369.60
10	118,013.95
11	132,175.63
12	148,036.70
13	165,801.11
14	185,697.24
15	207,980.91
16	232,938.62
17	260,891.25
18	292,198.20
19	327,261.98
20	366,533.42
21	410,517.43
22	459,779.52
23	514,953.07
24	576,747.43
25	551,747.43
26	526,747.43
27	501,747.43
28	476,747.43
29	451,747.43
30	426,747.43
31	401,747.43
32	376,747.43
33	351,747.43
34	326,747.43
35	301,747.43
36	276,747.43
Total Cost	10,028,945.27

Total Income = Total Cost + 24% Return*

Total Income = 10,028,945.27 + 2,406,946.87 = 12,435,892.14

Total Qtr in 3 Years = 4X3 = 12

Hence, Average Quarterly income = = 1,036,324.34

Answer : 1,036,324.34

*Note: Return: 10,028,945.27 X 24% = 2,406,946.87