D CA Homework c Not secure l ezto.mheducation.com/hrm.tpx connect FINANCE instru

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D CA Homework c Not secure l ezto.mheducation.com/hrm.tpx connect FINANCE instructions I help C4 Homework Save &Ext Submit Question 8 (of 1o) 0.90 points Imprudential, Inc., has an unfunded pension liability of $751 million that must be paid in 30 years. To assess the value of the firm's stock, financial analysts want to discount this liability back to the present if the relevant discount rate is 9 percent, what is the present lue of this liability? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g, 32.16.) Present valueS Hints ReferenceseBook & Resources Hint1 Hint uz Check my work O Type here to search

Explanation / Answer

This question required application of time value of money basic function: FV = PV * (1 + r)n

$751 = PV * (1 + 9%)30

$751 = PV * 13.2677

PV = $56.60

Hence, PV of pension liability is $56.60 mil

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