Managerial Accounting
5th Edition
ISBN: 9781259176494
Author: John J Wild, Ken Shaw Accounting Professor
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter B, Problem 15E
To determine
Present Value:
Present value of money means the present or current value of a future
Future Value:
The future value is the value of present cash flow at specified time period and at specified
We have to determine the number of annual investment that will be required in given condition.
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Kevin Morales invests $7,302.63 now for a series of $1,500 annual returns beginning one year from now. Kevin will earn a return of 10% on the initial investment. How many annual payments of $1,500 will Kevin receive?
Steven Garcia invests $14,404.31 now for a series of $2,700 annual returns beginning one year from now. Steven will earn a return of
10% on the initial investment.
Click here to view the factor table 1.
Table 2
Table 3
Table 4
How many annual payments of $2,700 will Steven receive? (Hint: Use Table 4.) (For calculation purposes, use 5 decimal places as displayed
in the factor table provided, e.g. 5.24571. Round answer to O decimal places, e.g. 25.)
Number of annual payments
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