Nicole won a prize that will provide her with "end of the year" cash flows over the next 8 years. The first year inflow will be 39,747 dollars, however each additional cash flow will be decreased at a rate of 2.71% per year. Given that the current market interest rate is 5% per year compounded annually, compute how much this monetary award is worth in today's dollars. Hint: "g" = -2.71%. (note: round your answer to the nearest cent, and do not include spaces, currency signs, plus or minus signs, or commas)

Nicole won a prize that will provide her with "end of the year" cash flows over the next 8 years. The first year inflow will be 39,747 dollars, however each additional cash flow will be decreased at a rate of 2.71% per year. Given that the current market interest rate is 5% per year compounded annually, compute how much this monetary award is worth in today's dollars. Hint: "g" = -2.71%. (note: round your answer to the nearest cent, and do not include spaces, currency signs, plus or minus signs, or commas)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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Nicole won a prize that will provide her with "end of the year" cash flows over the next 8 years. The first year inflow will be 39,747 dollars, however each additional cash flow will be decreased at a rate of 2.71% per year. Given that the current market interest rate is 5% per year compounded annually, compute how much this monetary award is worth in today's dollars. Hint: "g" = -2.71%. (note: round your answer to the nearest cent, and do not include spaces, currency signs, plus or minus signs, or commas) 235,446 margin of error +/- 100
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