Vault Company Wants to Purchase an Asset with a 3-Year

question 52

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?

• A)$30,800
• B)$30,400
• C)$26,550
• D)$34,750

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Definitions:

Mexican Laborers

Workers from Mexico, often migrating for employment in agriculture, construction, and other industries, primarily in the United States.

Borderlands

Regions located on or near the borders between countries, often characterized by cultural blending and conflicts.

Nineteenth Century

A period spanning from January 1, 1801, to December 31, 1900, marking the 19th century of the Gregorian calendar.