Determine the present value of $200,000 to be received at the end of each of four years, using an interest rate of 7%, compounded annually, as follows:a. By successive computations, using the present value table in Exhibit 8.b. By using the present value table in Exhibit 10.c. Why is the present value of the four $200,000 cash receipts less than the $800,000 to be received in the future?

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A:

Q: 800

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A: Future Value = P 120,000 Interest Rate = 8% compounded semi-annually Time Period = 10 Years

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Q: i= 12% 2 3 4 n-1 $500 -$700 $900 $1100 A

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Q: present value

A: Present Value is the computed amount today of either a single sum amount or a series of payments to…