Homework Answers
(a)
Present value interest factor, 3%, 1 year = 0.971
Therefore, PV of profits = $34.6 billion * 0.971 = $33.59 Billion
(b)
Future value interest factor, 3%, 1 year = 1.030
Theerfore, FV of profits = $34.6 billion * 1.030 = $35.64 Billion
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