Your company needs to have $616,109 available in 4 years in order to pay off a...
Your company needs to have $616,109 available in 4 years in order to pay off a long-term contract for highly specialized manufacturing equipment. Your opportunity cost of capital is 8.2%. How much should you set aside right now in order to have just enough to meet that future commitment?
Homework Answers
Present value=616,109*Present value of discounting factor(rate%,time period)
=616,109/1.082^4
=616,109*0.729610301
=$449519.47(Approx)
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