You are paid to teach graduate-level classes for the university and want to determine how much...
You are paid to teach graduate-level classes for the university and want to determine how much money the university makes from your graduate-level classes. Based on historical data, you estimate that your graduate classes for the next six years will generate an average annual revenue of $99,850. If you discount these cash flows at an annual rate of 7.30%, what is the present value of the expected cash flows?
A) $895,133.52
B) $483,644.36
C) $471,562.95
D) $423,786.85
Homework Answers
Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=99850[1-(1.073)^-6]/0.073
=99850*4.722713549
=$471,562.95(Approx).
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