Homework Answers
104330
| Present Value of debt is recorded at the date of investment. | ||||||
| Present Value | =-pv(rate,nper,pmt,fv) | |||||
| = $ 104,329.48 | ||||||
| Where, | ||||||
| rate | = | Market rate | = | 5% | ||
| nper | = | Time | = | 5 | ||
| pmt | = | Annual cash flow | = | 100000*6% | = | $ 6,000 |
| fv | = | Terminal cash flow | = | $ 100,000 |
Note:There may be rounding off difference in decimal place.
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