You solve present value problems on a financial calculator just like you do future value problems. For the example we just examined (the present value of $1,000 to be received in three years at 15 percent), you would do the following: Enter 3. 15 1,000 I/Y PMT PV FV Solve for -657.52 Notice that the answer has a negative sign; as we discussed earlier, that's because it represents an out- flow today in exchange for the $1,000 inflow later.

You solve present value problems on a financial calculator just like you do future value problems. For the example we just examined (the present value of $1,000 to be received in three years at 15 percent), you would do the following: Enter 3. 15 1,000 I/Y PMT PV FV Solve for -657.52 Notice that the answer has a negative sign; as we discussed earlier, that's because it represents an out- flow today in exchange for the $1,000 inflow later.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...

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