You believe you have discovered a new medical device. You anticipate it will take additional time to get the device fully operational, run clinical trials, obtain FDA approval, and sell to a buyer for $250,000. Assume a discount rate of 7% compounded annually. What is the value today of discovering the medical device, assuming you sell it for $250,000 in (a) two years, (b) three years, or (c) four years? (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.) Payment Interest Amount Rate Compounding Period Due Present Value $ 250,000 7% Annually 2 years 317,450.00 b. 250,000 7% Annually 3 years L 250,000 7% Annually 4 years
You believe you have discovered a new medical device. You anticipate it will take additional time to get the device fully operational, run clinical trials, obtain FDA approval, and sell to a buyer for $250,000. Assume a discount rate of 7% compounded annually. What is the value today of discovering the medical device, assuming you sell it for $250,000 in (a) two years, (b) three years, or (c) four years? (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.) Payment Interest Amount Rate Compounding Period Due Present Value $ 250,000 7% Annually 2 years 317,450.00 b. 250,000 7% Annually 3 years L 250,000 7% Annually 4 years
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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Transcribed Image Text:You believe you have discovered a new medical device. You anticipate it will take additional time to get the device fully operational,
run clinical trials, obtain FDA approval, and sell to a buyer for $250,000. Assume a discount rate of 7% compounded annually. What is
the value today of discovering the medical device, assuming you sell it for $250,000 in (a) two years, (b) three years, or (c) four years?
(FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.)
Payment
Amount
Interest
Rate
Compounding Period Due
Present
Value
$ 250,000
7%
Annually
2 years
317,450.00
b.
250,000
7%
Annually
3 years
L
250,000
7%
Annually
4 years
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