Chapter 6 Question 5

Using a present value table (Table 6-4andTable 6-5), calculate the present value for the following:(Use the appropriate value(s) from the tables provided. Round your PV factors to 4 decimal places and final answers to the nearest whole dollar.)

Required:

a.A car down payment of $20,000 that will be required in eight years, assuming an interest rate of 8%.

Present value ____________

b.A lottery prize of $6 million to be paid at the rate of $300,000 per year for 20 years, assuming an interest rate of 12%.

Present value______________

c.The same annual amount as in partb,but assuming an interest rate of 14%.

Present value______________

d.A financing lease obligation that calls for the payment of $8,000 per year for 10 years, assuming a discount rate of 6%.

Present value__________