NEXT Problem 511 Saul Cervantes has just purchased some equi

NEXT Problem 5.11 Saul Cervantes has just purchased some equipment for his landscaping business. For this equipment he must pay the following amounts at the end of the next five years: $16,840 $11,175. If the appropriate discount rate is 8.100 percent, what is the cost in today\'s dalilrs of the eme l hased tedat (Round ansiver o 2 declmal e 2 in today\'s dollars of the equipment Saul purchased today? (Round ansiver to 2 decimal places, e.g. 15.25 Present value Click if you would like to Show Work for this question: Open Show Work

Solution

Year

Amount Payable

Present Value Factor @ 8.1%

Discounted Cash flow

1

16840

0.92507

16840 * 0.92507

15578.18

2

8660

0.85575

8660 * 0.85575

7410.80

3

9500

0.79163

9500 * 0.79163

7520.49

4

12600

0.73231

12600 * 0.73231

9227.11

5

11175

0.67744

11175 * 0.67744

7570.39

47306.97

Present Value = $ 47306.97

Year	Amount Payable	Present Value Factor @ 8.1%		Discounted Cash flow
1	16840	0.92507	16840 * 0.92507	15578.18
2	8660	0.85575	8660 * 0.85575	7410.80
3	9500	0.79163	9500 * 0.79163	7520.49
4	12600	0.73231	12600 * 0.73231	9227.11
5	11175	0.67744	11175 * 0.67744	7570.39
				47306.97