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You have entered into an agreement for the purchase of land. The agreement specifies that you will take ownership of the land immediately. You have
You have entered into an agreement for the purchase of land. The agreement specifies that you will take ownership of the land immediately. You have agreed to pay $46,000 today and another $46,000 in three years. Calculate the total cost of the land today, assuming a discount rate of (a) 3%, (b) 5%, or (c) 7%. Note: Use tables, Excel, or a financial calculator. Do not round your intermediate values. Round your answers to 2 decimal places. (FV of \$1, PV of \$1, FVA of \$1, and PVA of \$1) You believe you have discovered a new medical device. You anticipate it will take additional time to get the device fully operational, run clinical trials, obtain FDA approval, and sell to a buyer for $580,000. Assume a discount rate of 4% compounded annually. What is the value today of discovering the medical device, assuming you sell it for $580,000 in (a) two years, (b) three years, or (c) four years? Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of \$1, PV of \$1, FVA of \$1, and PVA of \$1) You are saving for a new car. You place $12,800 into an investment account today. How much will you have after four years if the account earns (a) 3\%, (b) 5%, or (c) 7% compounded annually? Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of \$1, PV of \$1, FVA of \$1, and $ You have been issued a patent giving you exclusive rights to sell a new type of software. You believe the patent will produce sales of $169,000 each year as long as the software remains in demand. Assume a discount rate of 7% compounded annually. What is the value today of having the patent, assuming sales last for (a) three years, (b) four years, or (c) five years? Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of \$1, PV of \$1, FVA of \$1, and \$1)
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