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 $310,000. Assume a discount rate of 5% compounded annually. What is the value today of discovering the medical device, assuming you sell it for $310,000 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 financi calculator. Round your answers to 2 decimal places.) Payment Interest Amount Rate $ 310,000 Compounding Period Due 2 years 5% Annually Present Value
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 $310,000. Assume a discount rate of 5% compounded annually. What is the value today of discovering the medical device, assuming you sell it for $310,000 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 financi calculator. Round your answers to 2 decimal places.) Payment Interest Amount Rate $ 310,000 Compounding Period Due 2 years 5% Annually Present Value
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 $310,000. Assume a discount rate of 5%
compounded annually. What is the value today of discovering the medical device, assuming you sell it for $310,000 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.)
a.
b.
C.
Payment
Amount
$ 310,000
310,000
310,000
Interest
Rate
5%
5%
5%
Compounding Period Due
Annually
2 years
Annually
3 years
Annually
4 years
Present
Value
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