Use the Following Table $\text { Present Value of an Annuity of } 1$

question 165

Multiple Choice

Use the following table $\text { Present Value of an Annuity of } 1$$\begin{array}{rrrr}\text { Period } & 8 \% & 9 \% & 10 \%\\1 & .926 & .917 & .909 \\2 & 1.783 & 1.759 & 1.736 \\3 & 2.577 & 2.531 & 2.487\end{array}$ A company has a minimum required rate of return of 10% and is considering investing in a project that requires an investment of $99000 and is expected to generate cash inflows of $42000 at the end of each year for three years. The present value of future cash inflows for this project is

• A) $99000.
• B) $104454.
• C) $114898.
• D) $5454.

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Definitions:

Simulation

The process of creating a model of a real-world system and conducting experiments on that model to understand its behavior or to make predictions.

Forecast Charts

Visual tools that display predicted data trends over time to aid in forecasting future activities, trends, or values.

Theoretical Distributions

Mathematical functions that describe the probabilities of outcomes of a random variable based on certain assumptions and parameters.

Define Group

The process of specifying a set of individuals or items that share one or more characteristics, for the purpose of categorization or analysis.