Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 39

Present value of an annuity
Determine the present value of $200,000 to be received at the end of each of four years, using an interest rate of 7%, compounded annually, as follows:
a. By successive computations, using the present value table in Exhibit 8.
b. By using the present value table in Exhibit 10.
c. Why is the present value of the four $200,000 cash receipts less than the $800,000 to be received in the future