. Suppose the Land River Company decides to purchase a housing complex 6 years from now and estimates that it can save $15,000 a year. The company deposits the money at the end of the year in World Central Bank at 5% interest. Calculate the balance after 6 years and calculate the account balance if the rate were to decrease to 4%
8. Suppose the Land River Company decides to purchase a housing complex 6 years from now and estimates that it can save $15,000 a year. The company deposits the money at the end of the year in World Central Bank at 5% interest. Calculate the balance after 6 years and calculate the account balance if the rate were to decrease to 4%.
In economics, present value refers to the current value of a future stream of cash flow. Future value refers to the value of the current asset at some point in the future.
The present value analysis is helpful for businesses to determine the profitability of investments. The projects with a positive net present value (difference between the present value of cash inflow and the present value of cash outflow) are generally considered profitable.
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