Calculation the present value and cash payment reduction

Assignment Help Financial Management

Reference no: EM131185212

Please calculation the Present value and cash payment reduction.

Instruction: Please show the clear calculation and interpretation.

Company A sells machinery to Company B.

Company B agrees to pay Company A $200,000 at the end of each of the next 5 years, with discount rate 7%.

Instruction :

[1] provide a clear calculation to determine the first year of Present value of cash flow

[2] provide a clear calculation for each year cash payment reduction for 5 years.

[3] please provide an explanation toward your calculation.

Reference no: EM131185212

Questions Cloud

What was the firms net income : During the year, the Senbet Discount Tire Company had gross sales of $1.14 million. The firm’s cost of goods sold and selling expenses were $533,000 and $223,000, respectively. The firm also had notes payable of $880,000. These notes carried an inter..

What was the cost of the annuity to stickney : June Stickney purchased an annuity on January 1, 2016, which, at a 12% annual rate, would yield $6,000 each June 30 and December 31 for the next 6 years. What was the cost of the annuity to Stickney?

What is the expected quarterly return for the investment : Mary has an investment worth 55,500 dollars. The investment will make regular, fixed quarterly payments of 1,100 dollars to Bob forever with the first regular payment expected in 3 months from today. What is the expected quarterly return for the inve..

Ski resort is considering installing new ski lift : The owner of a ski resort is considering installing a new ski lift, which will cost $750,000. Expenses for operating and maintaining the lift are estimated to be $1,500 per day when operating. The owners wish to recover any invested capital within fi..

Calculation the present value and cash payment reduction : Please calculation the Present value and cash payment reduction. Company B agrees to pay Company A $200,000 at the end of each of the next 5 years, with discount rate 7%.

Organizing reports-structuring analytical reports : Three years ago, your company (a carpet manufacturer) modernized its Georgia plant in anticipation of increasing demand for carpets. Because of the depressed housing market, the increase in demand for new carpets has been slow to materialize. Georgia..

Calculate the payment net of discount : A store offers two payment plans. Under the installment plan, you pay 12.5% down and 12.5% of the purchase price in each of the next 7 years. If you pay the entire bill immediately, you can take a 15% discount from the purchase price. Calculate the p..

Plan on making your first savings deposit : You saving up to buy a car, you plan on making your first savings deposit one year from today, and then making deposits for the following 3 years. These are the amounts you plan to save at the end of each year: You expect to earn an annual rate of 6%..

Discuss how we actually derive a budget : Let's discuss how we actually derive a budget. Discuss the five basic steps of budgeting and how each are determined. What are some of the difficulties that can arise in this process, specifically for HCO's?

User Account

All Pages