Determine the present value of $170,000 to be received at the end of each of four years, using an interest rate of 5.5%, compounded annually, as a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year Second Year Third Year Fourth Year Total present value b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. c. Why is the present value of the four $170,000 cash receipts less than the $680,000 to be received in the future?
Determine the present value of $170,000 to be received at the end of each of four years, using an interest rate of 5.5%, compounded annually, as a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year Second Year Third Year Fourth Year Total present value b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. c. Why is the present value of the four $170,000 cash receipts less than the $680,000 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 12E
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