Hazel Company has just purchased equipment that requires annual payments of $20,

Question

Hazel Company has just purchased equipment that requires annual payments of $20,000 to be paid at the end of each of the next 4 years. The appropriate discount rate is 15%. What is the present value of the payments? Question 53 options: $57,099.60 $75,067.12 $80,000.00 $23,478.28 Hazel Company has just purchased equipment that requires annual payments of $20,000 to be paid at the end of each of the next 4 years. The appropriate discount rate is 15%. What is the present value of the payments? Hazel Company has just purchased equipment that requires annual payments of $20,000 to be paid at the end of each of the next 4 years. The appropriate discount rate is 15%. What is the present value of the payments? $57,099.60 $75,067.12 $80,000.00 $23,478.28 $57,099.60 $75,067.12 $80,000.00 $23,478.28 $57,099.60 $75,067.12 $80,000.00 $23,478.28

Explanation / Answer

Hi,

Please find the answer as follows:

Present Value of Payments = 20000/(1+.15)^1 + 20000/(1+.15)^2 + 20000/(1+.15)^3 + 20000/(1+.15)^4 = 57099.60

Option A (57099.60) is correct.

Thanks.

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