What Is the Future Value of the Following Cash Flows

question 100

Multiple Choice

What is the future value of the following cash flows at the end of year 3 if the interest rate is 7.25%? The cash flows occur at the end of each year.

• A) $8,758.04
• B) $8,806.39
• C) $10,073.99
• D) $10,314.00
• E) $10,804.36

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Definitions:

Market Failure

The inability of a market to bring about the allocation of resources that best satisfies the wants of society; in particular, the overallocation or underallocation of resources to the production of a particular good or service because of externalities or asymmetric information, or because markets fail to provide desired public goods.

Producer

An individual, company, or entity that creates goods or services to satisfy consumer demands.

Consumers

Individuals or entities that purchase goods and services for personal use or consumption.

Pay

Pay denotes the salary or wages received by a worker as compensation for their labor or services to an employer.