Question

Appendix D tor an approxdemate answer, but places.) round intermediate calculations Round your tinal answers to 2 decimal $31,000 received at end of nine years O s2.200 tinal answers to 2 decimal places) O 531000 received at end of nine years $7,500 received new

Answer 1

Ans 1 Present Value $7,500 $2,200 $31,000 $7,500 12,669.85 Note-1 13,020.00 (31000x 0.42) Note-1Year Cash flow Present Value PV Factor 0 1 2 1.00 0.91 0.83 0.75 0.68 0.62 0.56 0.51 0.47 0.42 2200 2200 2200 2200 2200 2200 2200 2200 2200 2,000.00 1,818.18 1,652.89 1,502.63 1,366.03 1,241.84 1,128.95 1,026.32 933.01 12,669.85 4 7 Ans 2 $ 31000, received at end of 9 Years Reason: As shown in Solu 1, it has the highest present value so it is more benefical

Ans b-1 Present Value $7,500 $2,200 $31,000 $7,500 12,181.50 Note-1 12,090.00 (31000x 0.39) Note-1 Year PV Factor Cash flow Present Value 1.00 0.90 0.81 0.73 0.66 0.59 0.53 0.48 0.43 0.39 1,981.98 1,785.57 1,608.62 1,449.21 1,305.59 1,176.21 1,059.65 954.64 860.03 12,181.50 4 2200 2200 Ans b2 $2200, received each year for 9 Years Reason: As shown in Solu 1, it has the highest present value so it is more benefical