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You are expecting a series of annual cash flows of $25,000 for six years. What is the present value of this annuity if the discount rate is 12%?.

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aamirmajeed5100

The present annuity value of six years with a 12% discount rate will be $102791.

According to the formula of present value here we have the solution;

                                        P=PMT× 1- [1/(1+r)n ]÷r

P= Present value of annuity value of this year =?

PMT=  $ amount of every annuity value = $25,000

r = DIscount rate = 12%/100 = 0.12

n= No. of years = 6 years

Solution:

                      P= $25,000 x 1 - [ 1/ (1+ 0.12)^6] = $25,000 x 0.4934/ 0.12

                      P= $25,000 x 4.112

                      P= $102791

Hence, the solution is here above. That is the present value of this annuity.

For more questions like this series of cash flow and annuity visits;

brainly.com/question/15150875?referrer=searchResults

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