The Following Problem Requires Present Value Information

question 44

Essay

The following problem requires present value information:
Biotech sold a patent on a new blood analyzer to Pharma.The sales agreement which was signed on January 1,2009 requires Pharma to pay Biotech $1 million immediately.In addition,Pharma is required to pay $700,000 each December 31 for 20 years starting with December 31,2009.Pharma and Biotech judge that a 10 percent is an appropriate interest rate for this arrangement.
a.Compute the present value of the receivable on Biotech's books on January 1,2009 immediately after receiving the $1 million down payment.
b.Compute the present value of the receivable on Biotech's books on December 31,2009.
c.Compute the present value of the receivable on Biotech's books on December 31,2010.

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Definitions:

Civil Inattention

A social behavior where individuals in public spaces acknowledge each other's presence but choose not to engage in deep social interaction.

Environmental Sociologists

Researchers who study the interactions between societies and their natural environments, focusing on issues like pollution, sustainability, and environmental justice.

Human-Made Environment

Environments and settings that have been created or significantly altered by human activity, as opposed to natural environments.

Wilderness

Natural areas left undisturbed by human development, where ecosystems operate freely without significant human influence.