If the Five-Year Present Value Annuity Factor Is 3

question 89

Multiple Choice

If the five-year present value annuity factor is 3.60478 and the four-year present value annuity factor is 3.03735, what is the present value of the $1 received at the end of five years?

• A)$0.63552
• B)$1.76233
• C)$0.56743
• D)$1.2132

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Definitions:

Unlevered Cost of Capital

The cost of capital for a company without debt, reflecting the risk of its equity alone.

Cost of Debt

The effective rate that a company pays on its current debt, inclusive of all fees and interest.

Total Assets

The sum of all assets owned by a company, including cash, investments, equipment, and real estate.

EBIT

Earnings Before Interest and Taxes, a financial metric that calculates a company's profitability based on operations, excluding interest and taxes.