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Mom and Pop Groceries has just dispatched a year's supply of groceries to the government of the Central Antarctic Republic. Payment of $ 1 4

Mom and Pop Groceries has just dispatched a year's supply of groceries to the government of the Central Antarctic Republic. Payment
of $145,000 will be made one year hence after the shipment arrives by snow train. Unfortunately, there is a good chance of a coup
d'tat, in which case the new government will not pay. Mom and Pop's controller therefore decides to discount the payment at 30%,
rather than at the company's 11% cost of capital.
a. Is it proper to use 30% as the discount rate in this situation?
b. How much is the $145,000 payment really worth if the odds of coup d'tat are 15%?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Complete this question by entering your answers in the tabs below.
Is it proper to use 30% as the discount rate in this situation?
Is it proper to use 30% as the discount rate in this situation?
Required A
How much is the $145,000 payment really worth if the odds of a coup d'tat are 15%?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Payment value
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