If the Present Value of Cash Flow X Is $240

question 27

Multiple Choice

If the present value of cash flow X is $240, and the present value of cash flow Y is $160, then the present value of the combined cash flows is:

• A)$240.
• B)$160.
• C)$80.
• D)$400.

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Definitions:

Fair Market Value

The price that property would sell for on the open market, between willing buyers and sellers under no pressure to act.

Capital Balances

The amount of money that the owners or shareholders have invested in the company.

Salary Allowances

Additional benefits or compensations given to employees over and above their regular salary, which could include housing, transportation, or medical allowances.

Net Income

The ultimate earnings of an enterprise once it has accounted for all expenditures and taxes against its total sales.