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As a result of a slowdown in operations, Tradewind Stores is offering employees who have been terminated a severance package of $90,000 cash paid today; $90,000 to be paid in one year; and an annuity of $31,000 to be paid each year for 4 years. Required: What is the present value of the package assuming an interest rate of 10 percent? (Future Value of $1, Present Value of $1, Future Value Annuity of $1. Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar. Present Value

As a result of a slowdown in operations, Tradewind Stores is offering employees who have been terminated a severance package of $90,000 cash paid today; $90,000 to be paid in one year; and an annuity of $31,000 to be paid each year for 4 years. Required: What is the present value of the package assuming an interest rate of 10 percent? (Future Value of $1, Present Value of $1, Future Value Annuity of $1. Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar. Present Value

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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As a result of a slowdown in operations, Tradewind Stores is offering employees who have been terminated a severance package of $90,000 cash paid today; $90,000 to be paid in one year; and an annuity of $31,000 to be paid each year for 4 years. Required: What is the present value of the package assuming an interest rate of 10 percent? (Future Value of $1, Present Value of $1, Future Value Annuity of $1. Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar. Present Value
Transcribed Image Text:As a result of a slowdown in operations, Tradewind Stores is offering employees who have been terminated a severance package of $90,000 cash paid today; $90,000 to be paid in one year; and an annuity of $31,000 to be paid each year for 4 years. Required: What is the present value of the package assuming an interest rate of 10 percent? (Future Value of $1, Present Value of $1, Future Value Annuity of $1. Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar. Present Value
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