Your firm wishes to purchase a financial contract that provides equal end-of-the-year cash flows of $18,000 per year for the next seven years. What is the present value of these cash flows if you choose to discount them at a rate of 8% per year?
What will be an ideal response?
Answer:
PV = PMT × = $18,000 × = $93,714.66.
MODE = END
INPUT 7 8 ? -18,000 0
KEY N I/Y PV PMT FV
CPT 93,714.66
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