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
This would be an annuity due (the difference between annuity due and normal annuity is that annuity due ...
This solution explanation of the annuity due formula for calculation of cash flow scenarios.