Sally Mander has been offered the following set of cash flows (or benefits) over the next...

 

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Sally Mander has been offered the following set of cash flows (or benefits) over the next 10 years: End of years 1 through 6 she will receive $50,000 annually and at the end of year 10 she will receive $75,000. No benefits will be received for years 7 through 9. What is this benefit set up worth to her in today's dollars if she feels comfortable assuming a 7% interest rate? Sally Mander has been offered the following set of cash flows (or benefits) over the next 10 years: End of years 1 through 6 she will receive $50,000 annually and at the end of year 10 she will receive $75,000. No benefits will be received for years 7 through 9. What is this benefit set up worth to her in today's dollars if she feels comfortable assuming a 7% interest rate?

Answer rating: 100% (QA)

To determine the present value of the cash flows we need to discount each cash flow to its present v... View the full answer