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Foundations Of Financial Management
Found in: Page 282
Foundations Of Financial Management

Foundations Of Financial Management

Book edition 16th
Author(s) Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Pages 768 pages
ISBN 9781259277160

Short Answer

Question: You will receive $6,800 three years from now. The discount rate is 10 percent. c. What is the value of your investment today? Multiply your answer to part b by (1/1.10).

Answer

The value of investment today is $5,108.94.

See the step by step solution

Step by Step Solution

Step 1: Identification of the required information

Value of investment one years from now (FV1) = $5,619.83

Interest Rate (i) = 10%

Discount factor = 1.10

Step 2: Value of investment today (PV)

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