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Your local travel agent is advertising an upscale winter vacation package for travel three years from...

Your local travel agent is advertising an upscale winter vacation package for travel three years from now to Antarctica. The package requires that you pay $15944 today, $12933 one year from today, and a final payment of $24039 on the day you depart three years from today. What is the cost of this vacation in today's dollars if the discount rate is 4 %? (Round answer to 2 decimal places. Do not round intermediate calculations).

Solutions

Expert Solution

Year Cash flow PVIF@4% Present value
0 $         15,944                   1.000 $               15,944.00
1 $         12,933                   0.962 $               12,435.58
2 $                   -                     0.925 $                              -  
3 $         24,039                   0.889 $               21,370.58
Cost of vacation in today's dollars $               49,750.16

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