Vault Company Wants to Purchase an Asset with a 3-Year $\text { Present Value of } 1$

question 14

Multiple Choice

Vault Company wants to purchase an asset with a 3-year useful life, which is expected to produce cash inflows of $10,000 each year for two years, and $15,000 in year 3.Vault has a 14% cost of capital, and uses the following factors.What is the present value of these future cash flows? $\text { Present Value of } 1$
$\begin{array}{lll}\text { Period } & 14 \% \\1 & .88 \\2 & .77 \\ 3& .67\end{array}$

• A)$30,800
• B)$30,400
• C)$26,550
• D)$17,750

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Definitions:

Metric System

is an international system of measurement based on the meter, kilogram, and second, among other units, used for scientific and everyday measurements.

Gram

A metric unit of mass equal to one thousandth of a kilogram.

Mass

A measure of the amount of matter in an object, often measured in kilograms or grams.

Scientific Method

A systematic approach to research and experimentation used to explore observations and answer questions, involving hypothesis formulation, experimentation, and conclusion.