Designs Now Is Opening a Showcase Office to Display and Sell

question 59

Multiple Choice

Designs Now is opening a showcase office to display and sell its computer-designed poster art. Designs expects cash flows to be $120,000 in the first year, $180,000 in the second year, $240,000 in the third year. If Designs uses 11 percent as its discount rate, what is the present value of the cash flows?

• A) $429,720
• B) $457,620
• C) $456,000
• D) $424,820