GE Marine Systems is planning to supply a Japanese shipbuilder with aero-derivative gas turbines to power 11DD-class destroyers for the Japanese Self-Defense Force. The buyer can pay the total contract price of $2,100,000 two years from now, when the turbines will be needed, or an equivalent amount now. At an interest rate of 10% per year, what is the equivalent amount now?
GE Marine Systems is planning to supply a Japanese shipbuilder with aero-derivative gas turbines to power 11DD-class destroyers for the Japanese Self-Defense Force. The buyer can pay the total contract price of $2,100,000 two years from now, when the turbines will be needed, or an equivalent amount now. At an interest rate of 10% per year, what is the equivalent amount now?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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GE Marine Systems is planning to supply a Japanese shipbuilder with aero-derivative gas turbines to power 11DD-class destroyers for the Japanese Self-Defense Force. The buyer can pay the total contract price of $2,100,000 two years from now, when the turbines will be needed, or an equivalent amount now. At an interest rate of 10% per year, what is the equivalent amount now?
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