In: Accounting
Present and future value tables of $1 at 9% are presented
below.
PV of $1 | FV of $1 | PVA of $1 | FVAD of $1 | FVA of $1 | |
1 | 0.91743 | 1.09000 | 0.91743 | 1.0900 | 1.0000 |
2 | 0.84168 | 1.18810 | 1.75911 | 2.2781 | 2.0900 |
3 | 0.77218 | 1.29503 | 2.53129 | 3.5731 | 3.2781 |
4 | 0.70843 | 1.41158 | 3.23972 | 4.9847 | 4.5731 |
5 | 0.64993 | 1.53862 | 3.88965 | 6.5233 | 5.9847 |
6 | 0.59627 | 1.67710 | 4.48592 | 8.2004 | 7.5233 |
Mustard's Inc. sold the rights to use one of its patented processes
that will result in cash receipts of $2,800 at the end of each of
the next five years and a lump sum receipt of $4,300 at the end of
the sixth year. The total present value of these payments if
interest is at 9% is:
Total Value of Present Value of these receipts is
$ 12,556 ($ 12,555.73 rounded off to $ 12,556).
Detailed answer is attached as images below: