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    Cash Flow Scenario and Annuity Due

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    Is there an easy or short cut to answering the question below? I need to verify my answer. I used the formula 1/(1.021). Thanks

    Cash Flow Scenario: Lease. Annual payments of $50,000 paid at the beginning of each of the next five years (total of $250,000). What is the NPV of all lease payments?

    year 1 NPV $50,000
    year 2 NPV $48,972
    year 3 NPV $47,964
    year 4 NPV $46,978
    year 5 NPV $46,012
    Total: $239,925

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    Solution Preview

    This would be an annuity due (the difference between annuity due and normal annuity is that annuity due ...

    Solution Summary

    This solution explanation of the annuity due formula for calculation of cash flow scenarios.