Your company will generate $67,000 in annual revenue each year for the next seven years from a new information database. if the appropriate interest rate is 8.75 percent, what is the present value of the savings?

Present Value = $340,055.22

Explanation:

Giving the following information:

Cash flow = 67,000

Number of years = 7

Interest rate = 8.75 percent

To calculate the present value, first, we need to calculate the final value using the following formula:

FV = {A*[ (1+i) ^n-1]}/i

A = cash flow

FV = {67,000 * [ (1.0875^7) - 1]} / 9.0875

FV = $611,722.28

Now, we can calculate the present value:

PV = FV / (1+i) ^n

PV = 611,722.28 / (1.0875^7)

PV = $340,055.22