(Related to Checkpoint 5.4) (Present value) Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of $380,000 due in 27 years. In other words, they will need $380,000 in 27 years. Toni Flanders, the company's CEO, is scrambling to discount the liability to the present to assist in valuing the firm's stock. If the appropriate discount rate is 7 percent, what is the present value of the liability? If the appropriate discount rate is 7 percent, the present value of the $380,000 liability due in 27 years is $ (Round to the nearest cent.) C

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
icon
Related questions
Question

question 13

(Related to Checkpoint 5.4) (Present value) Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of $380,000 due in 27 years. In other words, they will need $380,000 in 27 years. Toni Flanders, the company's CEO, is scrambling to discount the liability
to the present to assist in valuing the firm's stock. If the appropriate discount rate is 7 percent, what is the present value of the liability?
If the appropriate discount rate is 7 percent, the present value of the $380,000 liability due in 27 years is $ (Round to the nearest cent.)
C
Transcribed Image Text:(Related to Checkpoint 5.4) (Present value) Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of $380,000 due in 27 years. In other words, they will need $380,000 in 27 years. Toni Flanders, the company's CEO, is scrambling to discount the liability to the present to assist in valuing the firm's stock. If the appropriate discount rate is 7 percent, what is the present value of the liability? If the appropriate discount rate is 7 percent, the present value of the $380,000 liability due in 27 years is $ (Round to the nearest cent.) C
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education