Question

Suppose a project will result in an economic benefit of $20 million dollars 25 years from now. If the discount rate is 3%, what will be the present value of the benefits of this project

Answer 1

Answer:

PV= $11,073,515.08

Explanation:

Giving the following information:

Suppose a project will result in an economic benefit of $20 million 25 years from now. The discount rate is 3%, what will be the present value of the benefits of this project.

To calculate the present value, we need to use the following formula:

PV= FV/(1+i)^n

PV= 20,000,000/ (1.03^20)

PV= $11,073,515.08