You Are the Recipient of an Inheritance That Will Pay

question 13

Multiple Choice

You are the recipient of an inheritance that will pay you and your heirs $13,000 a year forever.What is this inheritance worth today at a discount rate of 5.85 percent?

• A)$222,222.22
• B)$239,250.00
• C)$211,953.94
• D)$241,141.41
• E)$236,004.98

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Definitions:

OCF

Operating Cash Flow, which is the cash generated by normal business operations.

Sales Quantity

The total number of units of a product or service sold during a specific period of time.

Operating Leverage

A measure of how sensitive a company's operating income is to its revenue changes, indicating the proportion of fixed versus variable costs.

Initial Cash Outlay

The initial funds required for an investment or project, including costs such as acquisition, setup, and related expenses.