Answered: What is the discounted value of $60,000…

What is the discounted value of $60,000 due in 5 years and 8 months if j2 = 6%. Assume the practical (approximate) method is used. %3D

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 9EB: If you invest $15,000 today, how much will you have in (for further instructions on future value in...

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

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What is the discounted value of $60,000 due
in 5 years and 8 months if j2 = 6%. Assume
the practical (approximate) method is used.

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