If a hospital received $9,000 in payments per year at the end of each year for the next (12) years from an uninsured patient who underwent an expensive operation, what would be the current value of these collection payments:at a 4% rate of return?at a 8% rate of return?at a 4% rate of return if the payments were received at the beginning of the year?at a 8% rate of return if the payments were received at the beginning of the year?

Current value of collection payments(Present value) = Annual payment x PVIAF (rate %, year)

Answered: If a hospital received $9,000 in…

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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If a hospital received $9,000 in payments per year at the end of each year for the next (12) years from an uninsured patient who underwent an expensive operation, what would be the current value of these collection payments:

at a 4% rate of return?
at a 8% rate of return?
at a 4% rate of return if the payments were received at the beginning of the year?
at a 8% rate of return if the payments were received at the beginning of the year?

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