ACC312 Federal Taxation

Application problems

Use the present value tables in Appendix A and Appendix B to compute the NPV of each of the following cash inflows:

a. $18,300 received at the end of 15 years. The discount rate is 5 percent.

b. $5,800 received at the end of four years and $11,600 received at the end of eight years. The discount rate is 7 percent.

c. $1,300 received annually at the end of each of the next seven years. The discount rate is 6 percent.

d. $40,000 received annually at the end of each of the next three years and $65,000 received at the end of the fourth year. The discount rate is 3 percent.