Determination of the present value of cash inflows required for travelling around the world describes the computation of present value of the amount to be invested to withdraw in the future years. The present value of the amount to be invested today to withdraw it in later future years shall be computed by discounting the future withdrawals with the rate of bank interest based on period for which it would have been invested. The amount to be withdrawn shall be the sum of amount invested and time value of money (i.e. interest). TheComputation of present value of amount to be invested to withdraw in some future years need to be determined.

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Chapter 26, Problem E26.22E

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Determination of the present value of cash inflows required for travelling around the world describes the computation of present value of the amount to be invested to withdraw in the future years. The present value of the amount to be invested today to withdraw it in later future years shall be computed by discounting the future withdrawals with the rate of bank interest based on period for which it would have been invested. The amount to be withdrawn shall be the sum of amount invested and time value of money (i.e. interest).

TheComputation of present value of amount to be invested to withdraw in some future years need to be determined.

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Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's expenses, Gross margin, and Net income?

Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?

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