Suppose You Have Two Clients Who Need Your Services for Two

question 108

Essay

Suppose you have two clients who need your services for two years.One agreed to pay you $50,000 one year from now and another $50,000 in two years while the other paid $35,000 after one year,but $65,000 after two years.Assuming an interest rate of 10%,which one has a higher present value? Round off to the nearest dollar.

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Definitions:

Electronic Invoice Form

An invoice document sent digitally, often through email or a web service, to request payment for goods or services rendered.

Vertical Analysis

A financial statement analysis method where each entry for a given year is presented as a percentage of a total figure.

Segment Revenues

The income generated from specific divisions or segments of a business.

Fiscal Years

A one-year period used for accounting and financial purposes, which may not necessarily coincide with the calendar year.