What Is the Present Value of $1,100 Per Year,at a Discount

question 54

Multiple Choice

What is the present value of $1,100 per year,at a discount rate of 10 percent if the first payment is received 6 years from now and the last payment is received 30 years from now?

• A)$6,199.74
• B)$6,238.87
• C)$6,333.33
• D)$6,420.12
• E)$6,511.08

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Definitions:

Understated Assets

Occurs when the book value of assets is reported at less than their actual value on the financial statements, potentially misleading stakeholders.

Net Income

The profit of a company after subtracting all expenses from all revenues, indicating overall earnings performance.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset over its useful life.

Net Book Value

The calculated value of an asset after subtracting accumulated depreciation or amortization, representing its current value on the balance sheet.