What Is the Present Value of a $750 Payment Made

question 88

Multiple Choice

What is the present value of a $750 payment made in three years when the discount rate is 5 percent?

• A) $646.96
• B) $647.88
• C) $712.50
• D) $868.22

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Definitions:

Cash Flow

Total funds inflow and outflow within a business and its effect on liquid assets.

WACC

Weighted Average Cost of Capital; a calculation used to estimate the cost of financing a company's assets, blending debt and equity costs.

MIRR

Modified Internal Rate of Return, which adjusts for the differences in reinvestment rates of a project's cash flows.

Project

A temporary endeavor undertaken to create a unique product, service, or result with defined objectives and constraints.