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