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Dafna1 [17]
3 years ago
7

the lease on a new office requires an immediate payment of $24,000 (in year 0) plus $24,000 per year at the end of each of the n

ext 10 years. at a discount rate of 14 percent, what is the present value of this stream of lease payments?
Business
1 answer:
Novosadov [1.4K]3 years ago
6 0

Answer:

<em><u>The answer is</u></em>: <u>$ 20,640 every year.</u>

<u />

Explanation:

<u>Leasing a new office requires an immediate payment of $ 24,000 (in year 0)</u>, plus $ 24,000 per year at the end of each of the next 10 years, which would be a total of $ 240,000 in 10 years, with a fee <u>Discount of 14 percent</u>, would be 240,000 x 0.14 = $ 33,600 in those 10 years, which would be $ 3,360 annually, <u>which subtracted from the $ 24,000 annually</u> would be a total of: $ 20,640.

<em><u>The answer is</u></em>: <u>$ 20,640 every year.</u>

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