Question: Please show how you got the answer: Buzzanca Industries has an unfunded waste site cleanup liability of $6 million that must be paid out in

Please show how you got the answer:

  1. Buzzanca Industries has an unfunded waste site cleanup liability of $6 million that must be paid out in full 22 years from now. If the relevant annual discount rate is 6.75%, what is the present value of this liability?
  2. You would like to give your 4-year old daughter $60,000 towards her college education 14 years from now. How much money must you set aside today for this purpose if you can think you can earn 8.25% per year on your investments?

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