Langdon Company Is Considering Purchasing a Capital Investment That Is

question 8

Multiple Choice

Langdon Company is considering purchasing a capital investment that is expected to provide annual cash inflows of $10,000 per year for 3 years.Assuming that Langdon's required rate of return is 8%,what is the present value of these cash inflows? (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.Do not round your intermediate calculations.Round your final answer to the nearest dollar.)

• A) $24,018
• B) $24,869
• C) $33,121
• D) $25,771

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Definitions:

Statistical Arbitrage

Use of quantitative systems to uncover many perceived misalignments in relative pricing and ensure profit by diversifying across all of these small bets.

Quantitative Techniques

Mathematical and statistical methods used to analyze numerical data, often applied in economics, finance, and operational research to facilitate decision-making.

Nearly Identical Duration

A characteristic of two or more financial instruments whose cash flows match or are very close in terms of their time structure, minimizing interest rate risk.