Question
You have an expecte d liability (cash outflow) of $100,000 in 12years, and you use a discount rate of 7%. Assume annual compounding. (a)How much
You have an expecte d liability (cash outflow) of $100,000 in 12years, and you use a discount rate of 7%. Assume annual compounding.
(a)How much would you need right now as savings to cover the expected liability?
(b)How much would you need to set aside at the end of each year for the next 12years to cover the expected liability?
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
14th edition
133879879, 978-0133879872
