Answered: A new roof will cost $12000 . It will…

A new roof will cost $12000 . It will be invested in 19 years . If the interest rate is 7% per year . How much must be saved each year to accumulate $12000 after 19 years

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 20EA: Towson Industries is considering an investment of $256,950 that is expected to generate returns of...

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

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A new roof will cost $12000 . It will be invested in 19 years . If the interest rate is 7% per year . How much must be saved each year to accumulate $12000 after 19 years

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