The Present Value of the Following Cash Flows Is Known

question 25

Multiple Choice

The present value of the following cash flows is known to be $6,939.91; $500 today,$2,000 in 1 year,and $5,000 in 2 years.What discount rate is being used?

• A) 3%
• B) 4%
• C) 5%
• D) 6%

---

Definitions:

Journalizing

The process of recording transactions in a journal so that their effects are reflected in the accounting records.

Transaction Data

Information collected about each specific activity that takes place within a business, which can be used for various financial and management analysis purposes.

Journal

A daily record of financial transactions, providing a detailed account of all entries for each transaction.

Chart of Accounts

An organized list of all ledger account titles and numbers used by a company, serving as a framework for the recording of financial transactions.