What Is the Future Value of $124

question 80

Multiple Choice

What is the future value of $124.49 after earning simple interest for five years at an annual rate of 10%?

• A) $162.25
• B) $186.74
• C) $200.49
• D) $136.94
• E) $175.00

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Definitions:

Positive Net Present Value

A situation where the present value of cash inflows exceeds the present value of cash outflows, indicating a profitable investment.

Book Value Weights

Utilized in calculating weighted average cost of capital (WACC), referring to the proportion of each type of capital (debt, equity) based on its book value.

Market Values

The current prices at which assets, securities, or goods can be bought or sold in a marketplace, reflecting their perceived worth by buyers and sellers.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds, including the cost of debt and the cost of equity.