Consider the Following Timeline Detailing a Stream of Cash Flows

question 20

Multiple Choice

Consider the following timeline detailing a stream of cash flows: If the current market rate of interest is 6%, then the future value (FV) of this stream of cash flows is closest to:

• A) $1723
• B) $1626
• C) $1288
• D) $1500

---

Definitions:

Society's Total Utility

The cumulative measure of satisfaction or happiness that a society derives from consuming a particular amount of goods and services.

Diminishing Marginal Utility

A principle stating that as a consumer consumes more of a good or service, the satisfaction (utility) gained from each additional unit decreases.

Universal Basic Income

A financial program where a government provides all citizens with a regular, unconditional sum of money, regardless of employment status or wealth.

Household Receives

Refers to the income or goods that a household obtains, which may come from various sources such as wages, investments, or government programs.