If Lucy earns a 6 percent after-tax rate of return, $8,000 received in four years is worth how much today? Use Exhibit 3.1. (Round discount factor(s)to three decimal places.)

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To find the present value of $8,000 received in four years at a 6 percent after-tax rate of return, we use the formula for present value: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value ($8,000), r is the rate (6% or 0.06), and n is the number of periods (4 years). The discount factor for 6% over 4 years can be calculated as 1 / (1 + 0.06)^4 ≈ 0.792. Therefore, the present value is $8,000 * 0.792 = $6,336.

If Lucy Earns a 6 Percent After-Tax Rate of Return