Below Is a Table for the Present Value of $1

question 142

Multiple Choice

Below is a table for the present value of $1 at compound interest.
Below is a table for the present value of an annuity of $1 at compound interest.

Using the tables above, if an investment is made now for $20,000 that will generate a cash inflow of $7,000 a year for the next 4 years, what would be the present value of the investment cash inflows, assuming an earnings rate of 12%?

• A) $20,352
• B) $3,969
• C) $22,190
• D) $21,259

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Definitions:

AASB 141

An accounting standard issued by the Australian Accounting Standards Board that deals with the agricultural sector, specifically the accounting for agricultural activity.

IAS 16

An International Accounting Standard outlining the accounting treatments for property, plant, and equipment, including its recognition and measurement.

IAS 41

A global accounting guideline focused on managing financial records for farming activities, specifically regarding the conversion of biological assets, such as live plants and animals, into farm products.

Investment Property

Property (land or a building - or part of a building - or both) held to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services.