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Your company will generate $60,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 8.50 percent, what is the present value of the savings? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)Present value

Respuesta :

Answer:

The answer is "[tex]\$307,110.81[/tex]"

Explanation:

Following are the calculation for the present value of the saving:

Present value[tex]= c\times \frac{1-[\frac{1}{(1+r)^t}]}{r}\\\\[/tex]

                      [tex]=\$60,000 \times \frac{1-[\frac{1}{(1+8.5\%)^7}]}{8.5\%}\\\\=\$60,000 \times 5.118514\\\\= \$307,110.81\\\\[/tex]

therefore, the present value of the savings is [tex]\$307,110.81[/tex]

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