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Future value

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What is the future value of a 5-year ordinary annuity that promises to pay you $300 each year?
The rate of interest is 7 percent.

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Solution Summary

The solution calculates the future value for the given scenario

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Guillermo Furniture: Project future cash flows over the life of an investment alternative; what discount rate?

See attached files.

What information is needed to determine the present value of an investment? Using the information in the Guillermo Furniture Scenario and spreadsheet, how would you project the future cash flows each year over the life of one of the investment alternatives being considered? (Please provide a specific example.)

How does a company determine what discount (interest) rate to use when computing present value? Think about today's economy. How would you use the current information to determine the value of an investment today? Would it be higher or lower than it was a year ago? Why?

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