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Volgvan
3 years ago
12

St trucking just signed a $3.8 million contract. the contract calls for a payment of $1.1 million today, $1.3 million one year f

rom today, and $1.4 million two years from today. what is this contract worth today at a discount rate of 8.7 percent? $3,783,648.48 $3,480,817.37 $2,108,001.32 $3,202,223.89 $3,202,840.91
Business
1 answer:
Gnom [1K]3 years ago
3 0
The answer is $3,480,817.37   The contract is worth <span>$3,480,817.37 today at a discount rate of  8.7 percent.

</span>PV = $1.1M + ($1.3M/1.087) + ($1.4M/1.087 square<span>) = $3,480,817.37</span>
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