Question

You have a subcontracting job with local manufacturing firm your agreement calls for annual payment of $50000 for the next five years at a discount rate of 12% what is this job worth to you today

Answer 1

Answer:

$1,89,539.34

Explanation:

For this question, we use the Present value formula that is shown on the excel spreadsheet. Kindly find the attachment below:

Given that

Future value = $0

Rate of interest = 10%

NPER = 5 years

PMT= $50,000

The formula is shown below:

= -PV(Rate,NPER, PMT,FV,type)

So, after solving this, the present value is $1,89,539.34