question archive Your company will generate $72,000 in annual revenue each year for the next eight years from a new information database
Your company will generate $72,000 in annual revenue each year for the next eight years from a new information database
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Your company will generate $72,000 in annual revenue each year for the next eight years from a new information database. If the appropriate interest rate is 8.25 percent, what is the present value of the savings? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 42.18)) Calculate the Present value in $.
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Answer:
Present value of the savings:
Amount = $72,000
Interest Rate = 8.25%
Time = 8 year
PVA =C({1 − [1/(1 +r)t]} /r)
PVA = $72,000{[1 − (1/1.0825)] / 0.0825}
= $72,000 [(1- 0.5304)/ 0.0825]
Present Value = $409861.24
