Lester's just signed a contract that will provide the firm with annual cash inflows of $28,000,$35,000,and $42,000 over the next three years with the first payment of $28,000 occurring one year from today.What is this contract worth today at a discount rate of 7.25%?
A) $88,311.08
B) $89,423.91
C) $90,580.55
D) $91,341.41

Question

Quizplus · Accepted Answer

PV = $28,000 / 1.0725 + $35,000 / 1.0725² + $42,000 / 1.0725³PV = $90,580.55

Lester's Just Signed a Contract That Will Provide the Firm