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

question 27

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? $\text { Present Value of } 1$
$\begin{array}{ll}\text { Period }&14\%\\1 & .88 \\2 & .77 \\3 & .67\end{array}$

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

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Definitions:

Injunctive Relief

A court-ordered act or prohibition against a particular act or behavior, typically to prevent irreparable harm.

Compensatory Damages

Compensatory damages are monetary awards to a plaintiff in a lawsuit, intended to compensate for actual losses or injuries incurred due to the defendant's actions.

Consequential Damages

A type of damages in a lawsuit that result not directly from the act but as a consequence of the initial act, often involving loss of profit or other indirect losses.

Liquidated Damages

Predetermined damages agreed upon by the parties in a contract to be paid if a specific breach occurs, as compensation not as a penalty.