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86. Compute the present value of the following single amounts to

Question : 86. Compute the present value of the following single amounts to : 1412659

 

 

86.

Compute the present value of the following single amounts to be received at the end of the specified period at the given interest rate.
 


Item

Invested
Amount

Invested
Rate

Number of Periods

a.

$40,000

7%

20

b.

$20,000

6%

25

c.

$50,000

11%

10

 


 
 

 

 

 

 

 

87.

DON Corp. is contemplating the purchase of a machine that will produce net after-tax cash savings of $20,000 per year for five years. At the end of five years, the machine can be sold to realize after-tax cash flows of $5,000. Interest is 12%. Assume the cash flows occur at the end of each year.

Required:

Calculate the total present value of the cash savings. 
 
 

 

 

 

 

 

88.

Touche Manufacturing is considering a rearrangement of its manufacturing operations. A consultant estimates that the rearrangement should result in after-tax cash savings of $6,000 the first year, $10,000 for the next two years, and $12,000 for the next two years. Interest is at 12%. Assume cash flows occur at the end of the year.

Required: 

Calculate the total present value of the cash flows.


 
 

 

PV of future cash flows:
 

 

 

 

 

Solution
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Solved
Accounting 1 Year Ago 38 Views
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