How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Neo Your Own Question
Neo, Tutor
Category: Homework
Satisfied Customers: 12101
Experience:  BS Accounting
Type Your Homework Question Here...
Neo is online now
A new question is answered every 9 seconds

C. Suppose you just inherited a gold mine. This gold mine

Customer Question

C. Suppose you just inherited a gold mine. This gold mine is believed to have three years worth of gold deposit. Here is how much income this gold mine is projected to bring you each year for the next three years:
Year 1: $42,000,000
Year 2: $62,000,000
Year 3: $99,000,000
Compute the present value of this stream of income at a discount rate of 8%. Remember, you are calculating the present value for a whole stream of income, i.e. the total value of receiving all three payments (how much you would pay right now to receive these three payments in the future). Your answer should be one number - the present value for this oil well at a 8% discount rate but you have to show how you got to this number.
Now compute the present value of the income stream from the gold mine at a discount rate of 6%, and at a discount rate of 4%. Compare the present values of the income stream under the three discount rates.
Submitted: 8 years ago.
Category: Homework
Expert:  Neo replied 8 years ago.

Good day!


Welcome to JustAnswer!


Please download HERE.


If you found my answer helpful, please click the Accept button.


Thank you so much! :)

Customer: replied 8 years ago.



How did you get the PV Factor? For instance year 1 at 8% PV Factor is 0.9259.

Expert:  Neo replied 8 years ago.

You need to spend $3 to view this post. Add Funds to your account and buy credits.
Neo and other Homework Specialists are ready to help you
Customer: replied 8 years ago.
That explains it, thanks.

Related Homework Questions