Wasp Corporation has a loan agreement that provides it with cash today, and the company must pay $25,000 one year from today, $15,000 two years from today, and $5,000 three years from today. Wasp agrees to pay 10% interest. The following are factors from a present value table: ? Interest ratePeriods 10%1 0.909120.826430.7513What is the amount of cash that Wasp receives today?
What will be an ideal response?
| Periods | Payments | Present value of 1 at 10% | Present value of payments |
| 1 | $25,000 | 0.9091 | $22,727.50 |
| 2 | 15,000 | 0.8264 | 12,396.00 |
| 3 | 5,000 | 0.7513 | 3,756.50 |
| Total cash received | $38,880.00 |
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