Question
Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of $375 comma 000 375,000 due in 26 26 years.
Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of $375 comma 000
375,000 due in 26
26 years. In otherwords, they will need $375 comma 000
375,000 in 26
26 years. ToniFlanders, thecompany's CEO, is scrambling to discount the liability to the present to assist in valuing thefirm's stock. If the appropriate discount rate is 6
6 percent, what is the present value of theliability?
If the appropriate discount rate is 6
6 percent, the present value of the $375 comma 000
375,000 liability due in 26
26 years is $
nothing
.
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