Question

Use Table PV–1 and Table PV–2 to determine the present values of the following cash flows:
a. $15,000 to be paid annually for 10 years, discounted at an annual rate of 6 percent. Payments are to occur at the end of each year.
b. $9,200 to be received today, assuming that the money will be invested in a two-year certificate of deposit earning 8 percent annually.
c. $300 to be paid monthly for 36 months, with an additional “balloon payment” of $12,000 due at the end of the thirty-sixth month, discounted at a monthly interest rate of 1½ percent. The first payment is to be one month from today.
d. $25,000 to be received annually for the first three years, followed by $15,000 to be received annually for the next two years (total of five years in which collections are received), discounted at an annual rate of 8 percent. Assume collections occur at year-end.



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  • CreatedApril 17, 2014
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