Present value : Present value is the current value of a future sum of money. To calculate present value, the future cash flows are discounted at the discount rate. Simply, to find the present value of a future sum of money, one has to find out how much amount has to be invested today to receive the same amount in future. To determine: The present value of the incentive if one plans to work for the company for 42 years and the interest rate is 6%.

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Chapter 5, Problem 7P

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Present value: Present value is the current value of a future sum of money. To calculate present value, the future cash flows are discounted at the discount rate. Simply, to find the present value of a future sum of money, one has to find out how much amount has to be invested today to receive the same amount in future.

To determine:

The present value of the incentive if one plans to work for the company for 42 years and the interest rate is 6%.

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