Calculate present value of future earnings

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Reference no: EM1355991

Q1) Why do we need to calculate the present value of future earnings? A company can invest $100,000 to develop a new system, or it can put that amount into a second best alternative investment getting 10 percent in interest per year. In the second year, it can gain a benefit of $11,000 if it builds the new system now. If the company decides to build the new system, what will be the present value of that $11,000?

Reference no: EM1355991

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