If We Will Receive $100 Per Year Beginning One Year

question 142

Multiple Choice

If we will receive $100 per year beginning one year from now for a period of three years with a 12% discount rate, what would be the value of our investment today?

• A) $230
• B) $240
• C) $250
• D) $260

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Definitions:

Beginning Balances

The amounts in accounts at the start of a new accounting period, carried over from the end of the previous period.

Accounts Receivable

Accounts receivable are funds owed to a company by customers who have received goods or services but have not yet paid for them.

Accounts Payable

The amounts a company owes to creditors for items or services purchased on credit which are due within a year or within a company's operating cycle.

Equipment

Tangible assets used in operations, such as machinery and computers, which are not intended for sale.