How did they come up with the value 619,417 for PV of Benefits for the year 2015 using the formula that I have attached?
How did they come up with the value 619,417 for PV of Benefits for the year 2015 using the formula that I have attached?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How did they come up with the value 619,417 for PV of Benefits for the year 2015 using the formula that I have attached?
![2015
2016
2017
2018
2019
Total
Increased sales
500,000
530,000
561,800
595,508
631,238
Reduction in customer complaint calls
Reduced inventory costs
70,000
70,000
70,000
70,000
70,000
68,000
68,000
68,000
68,000
68,000
TOTAL BENEFITS:
638,000
668,000
699,800
733,508
769,238
PV OF BENEFITS:
619,417
629,654
640,416
651,712
663,552
3,204,752
PV OF ALL BENEFITS:
619,417
1,249,072
1,889,488
2,541,200
3,204,752](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc501e0f4-4d66-4b51-9525-2639a7285ed9%2Ffd97fe59-dd24-4bc3-bdb0-7898e396f58f%2F1m9mrfxp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2015
2016
2017
2018
2019
Total
Increased sales
500,000
530,000
561,800
595,508
631,238
Reduction in customer complaint calls
Reduced inventory costs
70,000
70,000
70,000
70,000
70,000
68,000
68,000
68,000
68,000
68,000
TOTAL BENEFITS:
638,000
668,000
699,800
733,508
769,238
PV OF BENEFITS:
619,417
629,654
640,416
651,712
663,552
3,204,752
PV OF ALL BENEFITS:
619,417
1,249,072
1,889,488
2,541,200
3,204,752
![Calculation
Definition
Formula
The amount of an investment today
compared to that same amount in the future,
taking into account inflation and time.
Present Value (PV)
Amount
(1 + interest rate)"
n = number of years in future](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc501e0f4-4d66-4b51-9525-2639a7285ed9%2Ffd97fe59-dd24-4bc3-bdb0-7898e396f58f%2F4mol1zc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Calculation
Definition
Formula
The amount of an investment today
compared to that same amount in the future,
taking into account inflation and time.
Present Value (PV)
Amount
(1 + interest rate)"
n = number of years in future
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