Question

ABC Company sold the rights to use one of their patented processes that
will result in them receiving cash payments of $2,000 at the end of each
of the next five years, a $15,000 cash payment at the end of the sixth
year, and a $10,000 cash payment at the end of the seventh year.

Calculate the total present value of these payments assuming the interest
rate is 5% compounded annually.

Use the time value of money table factors posted in carmen to answer this
question. To access these factors, click modules and then scroll to week
8. Click on the link labeled present & future value table factors. No
credit will be awarded for this question using a means other than these
table factors to answer this question.

Answer 1

Net present value for the patent is 26958.98 dollars means approximately 26959 dollars

We use a formula of compound interest that is keep the amount 2000 for first five years and 15000 in the sixth year and 10,000 in the seventh year value of p is taken as x and after the solution we will get the value for every year and the total is equals to you the answer