NOTE - There may be rounding off differences in the answer. I have rounded off the factors to FIVE decimal places. In case you need any assistance please comment
1.
Date | Years to discount | Amount | PV Factor | Present Value |
1/ (1 + 10%)^Year | ||||
Jan 1, 2020 | 0 | $ 620,000 | 1 | $ 620,000 |
Jan 1, 2021 | 1 | $ 620,000 | 0.90909 | $ 563,636 |
Jan 1, 2022 | 2 | $ 620,000 | 0.82645 | $ 512,399 |
Jan 1, 2023 | 3 | $ 620,000 | 0.75131 | $ 465,812 |
Jan 1, 2024 | 4 | $ 620,000 | 0.68301 | $ 423,466 |
Jan 1, 2025 | 5 | $ 620,000 | 0.62092 | $ 384,970 |
Jan 1, 2026 | 6 | $ 620,000 | 0.56447 | $ 349,971 |
Jan 1, 2027 | 7 | $ 620,000 | 0.51316 | $ 318,159 |
Jan 1, 2028 | 8 | $ 620,000 | 0.46651 | $ 289,236 |
Jan 1, 2029 | 9 | $ 620,000 | 0.4241 | $ 262,942 |
$ 4,190,592 |
2.
Date | Years to discount | Amount | PV Factor | Present Value |
1/ (1 + 10%)^Year | ||||
Jan 1, 2030 | 1 | $ 312,000 | 0.90909 | $ 283,636 |
Jan 1, 2031 | 2 | $ 312,000 | 0.82645 | $ 257,852 |
Jan 1, 2032 | 3 | $ 312,000 | 0.75131 | $ 234,409 |
Jan 1, 2033 | 4 | $ 312,000 | 0.68301 | $ 213,099 |
Jan 1, 2034 | 5 | $ 312,000 | 0.62092 | $ 193,727 |
Jan 1, 2035 | 6 | $ 312,000 | 0.56447 | $ 176,115 |
Jan 1, 2036 | 7 | $ 312,000 | 0.51316 | $ 160,106 |
Jan 1, 2037 | 8 | $ 312,000 | 0.46651 | $ 145,551 |
Jan 1, 2038 | 9 | $ 312,000 | 0.4241 | $ 132,319 |
Jan 1, 2039 | 10 | $ 312,000 | 0.38554 | $ 120,288 |
$ 1,917,103 |
3.
PV at January 1, 2020 = 1,916,928 X 0.42410 = 813,043
4.
Total cost = 813,043 + 4,190,592 = 5,003,636
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