7957152 82413 6134589 1739504 1162899 74885 423978 714647 801345667788899 9 1333

Question

7957152 82413 6134589 1739504 1162899 74885 423978 714647 801345667788899 9 133376 5272 71481477 7125873673358 1558971231574 7792145 57291 28371 1|0122334445 6. 7 7 8 8 9 9001-2245 62733 66 63 71 08 6 3 832 3 4676 1234568 555666666667 628394948 899001122356 0573517 8 671223 29684 24543 1-0. 1 2 2 3 3 4 4 5 5 5 5 6 6 6 6 6 6 6 7 7 7 0123456678899011223357 378448 83747 5935 39221714 691468912 6718670079 33444 17384948 1 45 90 54 20 12 05 23 9 3 03629 77101989102 01234 6 7 7 8 9 9 0 112334479 457962327 38371481 8023504 0. 1 2 3 3 4 4 5 5 6 6 6 7 7 7 7 8 8 8 8 3 79182 0123345556677788888990 .9 3603187498 7222 88999901 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 1234567890123456789

Explanation / Answer

As per Time value of money concept, $1 after 10 years is worth more than $1 today.

Hence, value of $1 today is less than $1 after 10 years.

Therefore, Present value= Futurevalue/ Prrsent value factor at required rate of interest.

Present value= $5,00,000/(1.08)10(read as 1.08 power 10)

=$5,00,000/0.46319

=$2,31,595.

Here, Annuity factor cannot be used since we are getting a single cash flow after 10 years,but not periodical cashflow through out 10 years period.

Note: From the above given table,one period is considered as one year.

Hence,$5,00,000 after 10 years is equal to $2,31,595 today.

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.