Ronen Consulting

Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of $375,000 due in 28years. In other words, they will need $375,000 in 28years. Toni Flanders, the company’s CEO, is scrambling to discount the liability to the present to assist in valuing the firm’s stock. If the appropriate discount rate is 7

percent, what is the present value of the liability If the appropriate discount rate is 7percent, the present value of the $375,000liability due in 28years is?

 

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