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lisov135 [29]
2 years ago
5

Ambrin Corp. expects to receive $2,000 at the end of each year for 10 years. Then the corporation expects to receive $3,500 per

year for the following 10 years, at the end of each year. What is the approximate present value of this 20-year cash flow
Business
1 answer:
mash [69]2 years ago
7 0

Answer:

The approximate present value = $24294

Explanation:

Given the annuity or expected amount for 10 years = 2000 dollars

The corporation expects the amount for next 10 years = $3500

Discount rate or interest rate = 8%

Present value = (2000 × PVIFA at 8%, 10 YEARS) + (3500 × PVIFA at 8%, 10 YEARS × PVIFat 8%, 10 YEARS)

Present rate = (2000 × 6.710) + (3500 × 6.710 X 0.463)

= $24293.6 or  $24294 (round off)

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