Question

ABC Company sold the rights to use one of their patented processes that will result in them receiving cash payments of $10,000 at the end of every six months for each of the next five years and a lump sum payment of $20,000 at the end of the sixth year. Calculate the total present value of these payments assuming the interest rate is 10% compounded semi-annually. You will need to use the time value of money table factors posted in carmen to answer this question. To access these factors, click modules and then scroll to the time value of money topic. Click on the link labeled present & future value table factors. No credit will be awarded for this question using a means other than these table factors to answer this question.

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.