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 $580,000. Assume a discount rate of 4% compounded annually. What is the value today of discovering the medical device, assuming you sell it for $580,000 in (a) two years. (b) three years, or (c) four years? (EV of $1. PV of $1. EVA 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 $ 580,000 580,000 580,000 Interest Rate Compounding 4% Annually 4% Annually 4% Annually Period Due 2 years 3 years 4 years 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 $580,000. Assume a discount rate of 4% compounded annually. What is the value today of discovering the medical device, assuming you sell it for $580,000 in (a) two years. (b) three years, or (c) four years? (EV of $1. PV of $1. EVA 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 $ 580,000 580,000 580,000 Interest Rate Compounding 4% Annually 4% Annually 4% Annually Period Due 2 years 3 years 4 years Present Value
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mm.21
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 $580,000. Assume a discount rate of 4% compounded annually. What is
the value today of discovering the medical device, assuming you sell it for $580,000 in (a) two years, (b) three years, or (c) four years?
(FV of $1. PV of $1. EVA 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
$ 580,000
580,000
580,000
Interest
Rate
4%
4%
4%
Compounding
Annually
Annually
Annually
Period Due
2 years
3 years
4 years
Present
Value
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