Cash Flows of $5000 in 2 Years and $7000 in 4

question 21

Multiple Choice

Cash flows of $5000 in 2 years and $7000 in 4 years with a present value of $10 594.32 in 1 year are being discounted at an interest rate of:

• A)5% per annum.
• B)6% per annum.
• C)7% per annum.
• D)8% per annum.

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Definitions:

Internal Clock

An innate mechanism that regulates physiological and behavioral functions in a roughly 24-hour cycle, also known as the circadian rhythm.

Pineal Gland

A small endocrine gland in the brain, secreting melatonin and involved in regulating sleep patterns.

Thyroid Gland

The endocrine gland that produces thyroxine and regulates metabolism.

Pituitary Gland

A pea-sized gland located at the base of the brain that produces hormones which regulate important bodily functions, including growth, metabolism, and reproduction.