You are offered a contract for a lump sum payment in the amount of $50,000 to be paid 3 years from now. You want to
You are offered a contract for a lump sum payment in the amount of $50,000 to be paid 3 years from now. You want to know how much to pay today for the promise of money in the future, if a 12% annual return on investment is expected. What is the promise of future payment worth today?
A $70,246.40
B. $35,589.01
C. $120,091.56
D. $48,529.51
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
Hence B is the correct answer Solution The Formula for present value is FV PV ...
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Step: 2
Step: 3
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Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham
7th Canadian Edition
133138445, 978-0133926330, 133926338, 978-0133138443
