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8. Your company will generate $73,000 in annual savings each year for the next eight years from a new information data base.

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Answer #1
Present value = Annual saving * PVAIF for 8.5% and 8 years
= $73000*5.639183
$ 4,11,660.36
Alternatively it can be solved as below
c= Cash Flow 73000
i= Interest Rate 8.5000%
n= Number Of Periods 8
Present Value Of An Annuity
= C*[1-(1+i)^-n]/i]
Where,
C= Cash Flow per period
i = interest rate per period
n=number of period
= $73000[ 1-(1+0.085)^-8 /0.085]
= $73000[ 1-(1.085)^-8 /0.085]
= $73000[ (0.4793) ] /0.085
= $4,11,660.36
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