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Sunland Company is considering an investment that will return a lump sum of $863,000, 8 years...

Sunland Company is considering an investment that will return a lump sum of $863,000, 8 years from now.

Click here to view the factor table.

(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

What amount should Sunland Company pay for this investment to earn an 9% return? (Round answer to 2 decimal places, e.g. 25.25.)

Lincoln Company should pay

$enter the amount that should be invested rounded to 2 decimal places

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Answer #1

Present value=863,000*Present value of discounting factor(rate%,time period)

=863,000/1.09^8

=863,000*0.50187

=$433113.81

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