the lease on a new office requires an immediate payment of $24,000 (in year 0) plus $24,000 per year at the end of each of the next 10 years. at a discount rate of 14 percent, what is the present value of this stream of lease payments?

Question

Business

Morgan Richards

10 August, 03:31

the lease on a new office requires an immediate payment of $24,000 (in year 0) plus $24,000 per year at the end of each of the next 10 years. at a discount rate of 14 percent, what is the present value of this stream of lease payments?

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Answers (1)

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Laci Hancock · Answer 1

The answer is: $ 20,640 every year.

Explanation:

Leasing a new office requires an immediate payment of $ 24,000 (in year 0), plus $ 24,000 per year at the end of each of the next 10 years, which would be a total of $ 240,000 in 10 years, with a fee Discount of 14 percent, would be 240,000 x 0.14 = $ 33,600 in those 10 years, which would be $ 3,360 annually, which subtracted from the $ 24,000 annually would be a total of: $ 20,640.

The answer is: $ 20,640 every year.