Prob 6-6

# 68058 180595 pres ent value of 1 n 5 i 8 from

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Unformatted text preview: t value of \$1: n = 5, i = 8% (from PV of \$1) Years 11-20: PVA = \$70,000 × 5.65022* = \$395,515 *Pres ent value of an ordinary annuity of \$1: n = 10, i = 12% (from PVA of \$1) PV = \$395,515 × 0.62092* = \$245,583 *Pres ent value of \$1: n = 5, i = 10% (from PV of \$1) PV = \$245,583 × 0.68058* = \$167,139 *Pres ent value of \$1: n = 5, i = 8% (from PV of \$1) End of Year 20: PV = \$400,000 × 0.32197* × 0.62092 × 0.68058 = \$54,424 *Pres ent value of \$1: n = 10, i = 12% (from PV of \$1) Total PV = \$279,490 + 180,595 + 167,139 + 54,424 = \$681,648 The max imum purc has e pric e is \$681,648. ezto.mhecloud.mcg r aw- hill.com/hm_accounting .tpx?todo= pr intviewSing le 2/2...
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## This homework help was uploaded on 03/22/2014 for the course ACC 3000 taught by Professor He during the Fall '09 term at CUNY Baruch.

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