Present and Future Value Tables of $1 at 9% Are

question 49

Multiple Choice

Present and future value tables of $1 at 9% are presented below.

-Mustard's Inc. sold the rights to use one of its patented processes that will result in cash receipts of $2,500 at the end of each of the next four years and a lump sum receipt of $4,000 at the end of the fifth year. The total present value of these payments if interest is at 9% is:

• A) $10,699.
• B) $11,468.
• C) $12,100.
• D) $14,000.

---

Definitions:

Tax Deferred

A status of investment earnings, such as interest or dividends, that are not subject to tax until they are withdrawn or realized at a future date.

Equity Capital

The funds raised by a company through the sale of common or preferred shares, representing ownership interests in the company.

Floatation Costs

The expenses incurred by a company in issuing new securities, including underwriting, legal, and registration fees.

Record Date

The specific date set by a company to determine the shareholders who are eligible to receive dividends or participate in corporate actions.