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Answer the following questions. 1)What is the present equivalent of $18,140.62 to be received in 15...

Answer the following questions.

1)What is the present equivalent of $18,140.62 to be received in 15 years when the interest rate is 10% per year?

2)The Parkview Hospital is considering the purchase of a new autoclave. This equipment will cost $179,648. This asset will be depreciated using an MACRS (GDS) recovery period of three years.

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Answer #1

1) Present Value = FV(P/F, i, 15)

                           = 18,140.62(P/F, 10%, 15)

                           = 18,140.62(0.2394)

                         = $4,342.86

Thus, the present equivalent is $4,342.86

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