66 861
Assignments Done
99,1%
Successfully Done
In October 2018

Answer to Question #43869 in Finance for Dan

Question #43869
A small business is considering purchasing a new machine that is projected to yield savings in monetary terms of £1,000 per year over a period of ten years. Using a 12 percent discount rate, calculate the present value of the savings (Hint: assume that the savings occur at the end of each year).
Expert's answer
Present Value = C ÷ (1 + r)^n,
Where C - Cash flow at a period; r - rate of return and n - number of
periods.
 
PV =£10,000 ÷ (1 + 0.12)^10 = £3219.73

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions