If the desired rate of return on a project is 10%, determine the present value of $40,000 to be received in four years using the following partial table of present value of $1 at compound interest. ? $$\begin{array} { c c c c }
\text { Year } & 6 \% & 10 \% & 12 \% \
\hline 1 & 0.943 & 0.909 & 0.893 \
2 & 0.890 & 0.826 & 0.797 \
3 & 0.840 & 0.751 & 0.712 \
4 & 0.792 & 0.683 & 0.636
\end{array}$$

Question

If the desired rate of return on a project is 10%, determine the present value of $40,000 to be received in four years using the following partial table of present value of $1 at compound interest. ? $$\begin{array} { c c c c } 
\text { Year } & 6 \% & 10 \% & 12 \% \
\hline 1 & 0.943 & 0.909 & 0.893 \
2 & 0.890 & 0.826 & 0.797 \
3 & 0.840 & 0.751 & 0.712 \
4 & 0.792 & 0.683 & 0.636
\end{array}$$

Quizplus · Accepted Answer

The present value of $1 at 10% for four years is 0.683. Therefore, the present value of $40,000 to be received in four years is $40,000 x 0.683 = $27,320.

If the Desired Rate of Return on a Project Is