Fishermen's Corp. is considering purchasing a boat. If the boat was purchased, it is expected to receive $20,000 at the end of the first year, $40,000 at the end of the second year, and $60,000 at the end of the third year within its business. What is the boat worth to Fishermen's Corp today, assume an 8% discount rate.
A) $120,000
B) $100,440
C) $47,640
D) $98,756

Question

Quizplus · Accepted Answer

Using Present value of $1 table: ($20,000 × 0.926) + ($40,000 × 0.857) + ($60,000 × 0.794) = $100,440