a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year $fill in the blank 1 Second Year fill in the blank 2 Third Year fill in the blank 3 Fourth Year fill in the blank 4 Total present value $fill in the blank 5 b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. $fill in the blank 6 c. Why is the present value of the four $310,000 cash receipts less than the $1,240,000 to be received in the future?
a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year $fill in the blank 1 Second Year fill in the blank 2 Third Year fill in the blank 3 Fourth Year fill in the blank 4 Total present value $fill in the blank 5 b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. $fill in the blank 6 c. Why is the present value of the four $310,000 cash receipts less than the $1,240,000 to be received in the future?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA3: Time Value Of Money
Section: Chapter Questions
Problem 11E
Related questions
Question
Present Value of an Annuity
Determine the present value of $310,000 to be received at the end of each of four years, using an interest rate of 6%, compounded annually, as follows:
a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar.
First year | $fill in the blank 1 |
Second Year | fill in the blank 2 |
Third Year | fill in the blank 3 |
Fourth Year | fill in the blank 4 |
Total present value | $fill in the blank 5 |
b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar.
$fill in the blank 6
c. Why is the present value of the four $310,000 cash receipts less than the $1,240,000 to be received in the future?
The present value is less due to..........................over the 4 years.
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