Date: Class:- Name: Financial Accounting ACCI1I. Professor Horowitz-Test 4- Fall

Question

Date: Class:- Name: Financial Accounting ACCI1I. Professor Horowitz-Test 4- Fall 2017 4, Using the following table, what is the present value of $40,000 to be received in 5 years, if the market rate is 7% compounded annually? 10% 7% 0.93458 0.87344 0.81630 0.76290 0.71299 0.66634 0.62275 0.58201 6% 5% 0.95238 0.90703 0.86384 0.82270 0.78353 0.74622 0.71068 0.67684 0.64461 0.61391 ods 0.94340 0.89000 0.79209 0.74726 0.70496 0.66506 0.62741 0.59190 0.54393 0.82645 0.75132 0.68301 0.62092 0.56447 0.51316 0.46651 0.42410 0.55840

Explanation / Answer

Solution: By using the Present value calculator "http://keisan.casio.com/exec/system/1232691482" Present value = $24,836.85 Based on the formula PV = 40000/1.07^5 = 28,519.45 From the table provided PV = 0.71299 X $40,000 = $28,519.6

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