Question
Problem 2. You are going to receive $25,000 in 10 years. You can earn interest at a 12% rate (this is your discount rate). What
Problem 2. You are going to receive $25,000 in 10 years. You can earn interest at a 12% rate (this is your discount rate). What is the value today (present value) of this payment?
Problem 3. You have won an award which will be paid over the next three years. Each award will pay a total of $30,000, but they are paid in differing amounts. You have a discount rate of 12%.
Calculate the present value of each option. Complete the table below and show your calculations below the table.
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| Option A | Option B | Option C |
| Year 1 | $5,000 | $10,000 | $15,000 |
| Year 2 | 10,000 | 10,000 | 10,000 |
| Year 3 | 15,000 | 10,000 | 5,000 |
| Total payments |
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| PV of payments |
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Financial Accounting Self Study Problems/Solutions Book
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel
4th Edition
0471205133, 978-0471205135
