Black Company will receive $30,000 at the end of each year for the next 8 years. Black has an annual cost of capital equal to 10 percent per year. Calculate the present value of the cash receipts, using a spreadsheet or a financial calculator or the appropriate formula. What is the present value of these cash receipts? Show the details that you used to calculate the PV.
Calculate the Present Value of an Annuity Due
An annuity is a stream of annual payments you will receive in the future. An Annuity in Advance means these annual payments will be received at the beginning of each year, starting today and in the future. An Annuity in Arrears means these annual payments will be received at the end of each year in the future. The present value of these stream of annual payments can be discounted using an appropriate interest rate using a formula.
Answer and Explanation:
Black Company will receive $30,000 at the end of each year for the next 8 years. Black has an annual cost of capital equal to 10 percent per year....
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from Business 110: Business MathChapter 8 / Lesson 3