Danner Corporation earns 12% on an investment that will return $900,000, 7 years

Question

Danner Corporation earns 12% on an investment that will return $900,000, 7 years from now. Below is some of the time value of money information that Danner has compiled that might help in planning compounded interest decisions.
Present Value of 1 for 7 periods at 12%..................0.45235
Future Value of 1 for 7 periods at 12%...................2.21068
Present Value of an annuity for 7 periods at 12%.....4.56376
Future Value of an annuity for 7 periods at 12%.....10.08901
To the closest dollar, what is the amount Danner should invest now to earn this rate of return?

Question 23 options:

$756,000

$410,738

$407,115

$198,961

$756,000

$410,738

$407,115

$198,961

Explanation / Answer

Amount Danner should invest now to earn this rate of return is $407,115 $407,115 Statement showing Cash flows Particulars Time PVf@12% Amount PV Cash inflows                   7.00               0.45235                         900,000.00                         407,115.00 PV of Cash Inflows                         407,115.00

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