contestada

Present value of an ordinary annuity: Dynamics Telecommunications Corp. has made an investment in another company that will guarantee it a cash flow of $22,500 each year for the next five years. If the company uses a discount rate of 15 percent on its investments, what is the present value of this investment

Respuesta :

Answer:

$75,423.49

Explanation:

Present value is the sum of discounted cash flows.

Present value can be calculated using a financial calculator.

Cash flow each year from year one to five = $22,500

I = 15%

Present value = $75,423.49

To find the PV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

Otras preguntas