1 Imprudential, Inc., has an unfunded pension liability of $735 million that must be paid...
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Finance
1 Imprudential, Inc., has an unfunded pension liability of $735 million that must be paid in 10 years. To assess the value of the firms stock, financial analysts want to discount this liability back to the present. Required: If the relevant discount rate is 5 percent, what is the present value of this liability?
2 You have just received notification that you have won the $2.04 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming youre around to collect), 82 years from now. Required: What is the present value of your windfall if the appropriate discount rate is 8 percent?
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