Great Lakes Inc. has an unfunded pension liability of $300 million that must be paid in 18 years. The financial analyst wants to discount this liability back to present for valuation purposes. The appropriate discount rate is 8%. What is the present value of this liability?

Given the above data, calculate the future value in each case. (using

The present value of the liability for Great Lakes Inc. is $148,741,039.43 when using an 8% discount rate over a period of 18 years. This amount is calculated by taking the future value ($300 million) and dividing it by 1 plus the discount rate (1 + 8%). This gives us a total of 0.9259, which when multiplied with the future value equals $148,741,039.43.

Present Value calculations are used to determine how much money must be invested today in order to reach the desired return after a set amount of time has passed. The calculation takes into account variables such as inflation and other potential risks that could reduce future returns on investments; thus it provides investors with an accurate estimate of what they can expect to receive in terms of returns from their current investments at any given point in time.

Having an understanding of how Present Value calculations work is essential for any financial analyst so that they can make informed decisions about where best to allocate funds within their organization’s budget while still ensuring they will reach their goals over time. In this particular case, Great Lakes Inc would need to invest approximately $148 million dollars today if they want to have enough reserve funds available in 18 years when the pension liability must be paid off.