Your company will generate $58,000 in annual revenue each year for the next six

Question

Your company will generate $58,000 in annual revenue each year for the next six years from a new information database. If the appropriate interest rate is 8.75 percent, what is the present value of the savings? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Your company will generate $58,000 in annual revenue each year for the next six years from a new information database. If the appropriate interest rate is 8.75 percent, what is the present value of the savings? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Hi,

Please find the answer as follows:

Nper = 6 (indicates the period)

PMT = 58000 (indicates annual revenue)

Rate = 8.75% (indicates the rate of interest)

FV = 0 (indicates the future value, if any)

PV = ? (indicates the present value)

Present Value = PV(Rate,Nper,PMT,FV) = PV(8.75%,6,58000,0) = 262134.07

Thanks

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