Ask Question
23 May, 21:29

The project steering committee is considering which project they should invest capital in. Mary's project promises to be worth $175,000 in 4 years. The steering committee is interest in Mary's project, but they would like to know the present value of the return if the interest rate is 6%. What is the value of Mary's project?

+3
Answers (1)
  1. 24 May, 00:43
    0
    Use Present value formula since $175,000 expected in 4 years is a one-time cashflow.

    PV = FV / (1+r) ^t

    FV; future value = 175,000

    r = interest rate = 6%

    n = 4

    PV = 175,000 / (1+0.06) ^4

    PV = 175,000 / 1.06^4

    =175,000 / 1.262477

    = 138,616.39

    Therefore, the value of Mary's project is $138,616.39
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The project steering committee is considering which project they should invest capital in. Mary's project promises to be worth $175,000 in ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers