Final answer:
The present discounted value of a future environmental benefit of $970.20 to be realized in two years, using a 5 percent nominal discount rate, is approximately $879.91. Whether the statement is 'True' or 'False' depends on the implied contention of the question, but the PDV calculation itself is accurate and confirms the validity of this analytical tool.
Step-by-step explanation:
To determine whether the statement is true or false, we must calculate the present discounted value (PDV) of the environmental benefit that is to be realized two years from today. The PDV calculation takes into account the future value of the benefit and discounts it by the given nominal discount rate of return, in this case, 5 percent. Using the formula for PDV, which is PDV = Future Value / (1 + r)^n where 'r' is the discount rate and 'n' is the number of periods (years), we can compute the present value of the $970.20 environmental benefit expected in two years.
The calculation will be as follows:
PDV = $970.20 / (1 + 0.05)^2 = $970.20 / (1.1025) = $879.91 (approximately)
Thus, the present discounted value of an environmental benefit worth $970.20 two years from now at a 5 percent discount rate is approximately $879.91. Therefore, the statement in the question appears to be missing a true or false contention since we have calculated the PDV. However, if the statement implies that the PDV calculation is possible and the value given is what the calculation is aiming to find, it can be considered 'True' that PDV is what has been determined.