In Order to Receive $12,000 at the End of Three

question 11

Multiple Choice

In order to receive $12,000 at the end of three years and $10,000 at the end of five years, how much must be invested now if you can earn 14% rate of return? (Ignore income taxes.) Use Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. (Round your intermediate calculations to 3 decimal places.)

• A) $12,978
• B) $8,100
• C) $13,290
• D) $32,054

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Definitions:

Secondary Memory

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String

A sequence of characters used to represent text in computer programming.