Memphis Metro just made a $75,000 purchase from a supplier, subject to the extension of suit-able trade credit terms. Using a discount rate of 7%, calculate the present value of this cash outflow assuming trade credit terms ofa.30 daysb.45 daysc.60 daysd.90 days

The Calculation of the Present Value of this cash outflow assuming trade credit terms of a.30 days b.45 days c.60 days d.90 days would be the following:

a.30 days is $74,625

b.45 days is $74,325

c.60 days is $74,100

d.90 days is $73,725

Explanation:

The Calculation of the Present Value of this cash outflow assuming trade credit terms of a.30 days b.45 days c.60 days d.90 days would be the following:

a. 30Days  

Present Value =Future Value/(1+r)^n  

$75,000/(1.07)^30/365  

$75,000*.995  

Present Value =$74,625  

b. 45 Days  

Present Value =Future Value/(1+r)^n  

$75,000/(1.07)^45/365  

75,000*.991  

Present Value =$74,325

c. 60Days  

Present Value =Future Value/(1+r)^n  

$75,000/(1.07)^60/365  

$75,000*.988  

Present Value =$74,100

d.90 Days  

Present Value =Future Value/(1+r)^n  

$75,000/(1.07)^90/365  

$75,000*.983  

Present Value =$73,725    

eds? ederal government or feds