Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
Question
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Chapter 11, Problem 9E

A.

To determine

Calculate the present value of $200,000 (Future amount).

B.

To determine

Calculate the present value of $200,000 (Future amount) by using present value table in Exhibit 7.

C.

To determine

Explain the reason why present value of four $200,000 cash receipts is less than $800,000 to be received in future.

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Present Value of an Annuity Determine the present value of $110,000 to be received at the end of each of four years, using an interest rate of 5%, compounded annually, as follows: a.  By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. b.  By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar.
Present Value of an Annuity Determine the present value of $340,000 to be received at the end of each of four years, using an interest rate of 7%, compounded annually, as follows: a.  By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year Second Year Third Year Fourth Year Total present value b.  By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar.

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Financial And Managerial Accounting

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