What Is the Future Value of the Following Cash Flows

question 309

Multiple Choice

What is the future value of the following cash flows at the end of year 3 if the interest rate is 7.25%? The cash flows occur at the end of each year.

• A) $8,758.04
• B) $8,806.39
• C) $10,073.99
• D) $10,314.00
• E) $10,804.36

---

Definitions:

Revenues

Revenue that comes from regular business activities, factoring in discounts and allowances for products that are returned.

Expenses

The outflows or using up of assets or incurring of liabilities during a period from delivering goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major operations.

FOB Shipper's Dock

A shipping term indicating that the buyer assumes responsibility for the goods once they are shipped, and the goods are considered delivered at the shipper's dock.

Raw Materials

Basic materials that are used in the production process to create goods and products.