What Is the Present Value of the Following Set of Cash

question 34

Multiple Choice

What is the present value of the following set of cash flows at an interest rate of 7 percent; $1,000 today, $2,000 at end of year one, $4,000 at end of year three, and $6,000 at end of year five?

• A)$9,731
• B)$10,412
• C)$10,524
• D)$11,524 PV = $1,000/(1.07)⁰ + $2,000/(1.07)¹ = $4,000/(1.07)³ + $6,000/(1.07)⁵
• = $1,000 + 1,869.16 + 3,265.19 + 4,277.92

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U.S. Dollar

The official currency of the United States, widely used as a standard unit of currency in international trade and finance.

U.S. Dollar

The official currency of the United States, widely used as a standard for international transactions.

Foreign Exchange Market

An international platform for trading national currencies with each other.

U.S. Dollar

The official currency of the United States of America, widely used as a global reserve currency.