Question

Calculate the present value of the following future cash flows, rounding all calculations to the nearest dollar: (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) $10,000 received in eight years with interest of 4% $10,000 received in each of the following eight years with interest of 4% Payments of $2,500, $5,500, and $7,000 received in years 6, 7 and 8, respectively, with interest of 12% 11. Calculate the present value of $10,000 received in eight years with interest of 4%. (Enter any factor amounts to three decimal places, X.XXX.) Future value x Present value factor - Present value 10000 12. Calculate the present value of $10,000 received in each of the following eight years with interest of 4%. (Enter any factor amounts to three decimal places, X.XXX.) Present value factor = Present value of an annuity Net present value 10000 X x 13. Calculate the present value for payments of $2,500, $5,500, and $7,000 received in years 6, 7 and 8, respectively, with interest of 12%. (Enter any factor amounts to three decimal places, X.XXX.) Future value X Present value factor Present value Year 6 Year 7 Year 8 Total

Answer 1

11.	Future value	x	Present value factor	=	Present value
	$10,000	x	0.731	=	$7,310
12.	Net present value	x	Present value factor	=	Present value of annuity
	$10,000	x	6.733	=	$67,330
13.
Years	Future value	x	Present value factor	=	Present value
Year 6	$2,500	x	0.507	=	$1,267.50
Year 7	$5,500	x	0.452	=	$2,486.00
Year 8	$7,000	x	0.404	=	$2,828.00

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