BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
34 views

What is the present value on January 1, 2019, of 7 equal future annual receipts of $30,000 if the first receipt is received on January 1, 2019, and the interest rate is 10% compounded annually?

To determine

Determine the present value on January 1, 2019.

Explanation

Future Value: The future value is value of present amount compounded at an interest rate until a particular future date.

n – 7 equal future annual receipts

C – $30,000 Cash flow

I –Interest rate 10% compounded annually.

First cash flow (cash receipts) received on January 1, 2019. Now, present value as on January 1, 2019 yet to be calculated. Here, the cash flow occurs during the first day of each time period, hence it is an annuity due.

Determine the present value ordinary annuity.

Present valueD= Cash flow ×(pDn=7,i=10%<

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What is the difference between cost of goods manufactured and cost of goods sold?

Managerial Accounting: The Cornerstone of Business Decision-Making

What is meant by the term slicing and dicing?

Accounting Information Systems

List and describe six costs of inflation.

Brief Principles of Macroeconomics (MindTap Course List)

NOMINAL INTEREST RATE AND EXTENDING CREDIT As a jewelry store manager, you want to offer credit, with interest ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)