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April 17, 2014

Homework Help: Finance

Posted by Justin on Tuesday, October 11, 2011 at 3:54pm.

I have a case study to do and I'm not sure how to go about it. I need to find the present value for three different offers, all of which have a 10% rate and ordinary annuities. This is the first offer:

$1,000,000 now
$200,000 each year for years 6 through and including year 15
Also, if the product did over $100 million in cumulative sales by the end of year 15, he would receive an additional $3,000,000 at that time. Dr. Wolf thought there was a 70 percent probability this would happen.

So my question is how do I even begin calculating the present value, cause to do that I need the future value and I'm not sure how to get that either. Any help would be appreciated. Thank you.

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