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Scenario: an Investor Is Considering Three Different Investment Options

question 132

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Scenario: An investor is considering three different investment options. Investing in Option A pays him $4,000 after 6 years, investing in Option B pays him $7,600 after 7 years, and investing in Option C pays him $9,000 after 8 years. If he deposits the amount with a bank, he would receive an annual interest rate of 9 percent.
-Refer to the scenario above.What is the present value of Option B?


Definitions:

FVTPL

Fair Value Through Profit or Loss, a classification under International Financial Reporting Standards for financial assets held for trading or designated upon initial recognition as measured at fair value, with changes in fair value recognized in profit or loss.

FVTOCI

stands for Fair Value Through Other Comprehensive Income, a classification under IFRS for financial assets that are measured at fair value with fluctuations recorded in other comprehensive income.

Share Price

The price at which a single share of a company's stock is bought or sold in the market.

ASPE

Accounting Standards for Private Enterprises, a set of accounting practices and principles for private companies in Canada.

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