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You have been issued a patent giving you exclusive rights to sell a new type of software. You believe the patent will produce sales of $241,000 each year as long as the software remains in demand. Assume a discount rate of 4% compounded annually and payments are made at the end of each year. What is the value today of having the patent, assuming sales last for (a) three years, (b) four years, or (c) five years? Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1. PV of $1. FVA of $1. and PVA of $1)

You have been issued a patent giving you exclusive rights to sell a new type of software. You believe the patent will produce sales of $241,000 each year as long as the software remains in demand. Assume a discount rate of 4% compounded annually and payments are made at the end of each year. What is the value today of having the patent, assuming sales last for (a) three years, (b) four years, or (c) five years? Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1. PV of $1. FVA of $1. and PVA of $1)

Essentials Of Investments
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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You have been issued a patent giving you exclusive rights to sell a new type of software. You believe the patent will produce sales of $241,000 each year as long as the software remains in demand. Assume a discount rate of 4% compounded annually and payments are made at the end of each year. What is the value today of having the patent, assuming sales last for (a) three years, (b) four years, or (c) five years? Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1, PV of $1, FVA of $1. and PVA of $1) a. b. C. Annuity Payment $ 241,000 241,000 241,000 Annual Rate 4% 4% 4% Interest Compounded Annually Annually Annually Period Invested 3 years 4 years. 5 years Present Value of Annuity
Transcribed Image Text:You have been issued a patent giving you exclusive rights to sell a new type of software. You believe the patent will produce sales of $241,000 each year as long as the software remains in demand. Assume a discount rate of 4% compounded annually and payments are made at the end of each year. What is the value today of having the patent, assuming sales last for (a) three years, (b) four years, or (c) five years? Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1, PV of $1, FVA of $1. and PVA of $1) a. b. C. Annuity Payment $ 241,000 241,000 241,000 Annual Rate 4% 4% 4% Interest Compounded Annually Annually Annually Period Invested 3 years 4 years. 5 years Present Value of Annuity
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