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25 April, 18:13

Suppose a project will result in an economic benefit of $20 million dollars 25 years from now. If the discount rate is 3%, what will be the present value of the benefits of this project

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  1. 25 April, 18:18
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    PV = $11,073,515.08

    Explanation:

    Giving the following information:

    Suppose a project will result in an economic benefit of $20 million 25 years from now. The discount rate is 3%, what will be the present value of the benefits of this project.

    To calculate the present value, we need to use the following formula:

    PV = FV / (1+i) ^n

    PV = 20,000,000 / (1.03^20)

    PV = $11,073,515.08
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