Given That a Project with an Estimated Life of Eight

question 63

Multiple Choice

Given that a project with an estimated life of eight years has a net present value of $125 000,calculate its equivalent annual value if the required rate of return is 9% p.a.

• A)$11 250 p.a.
• B)$250 937 p.a.
• C)$22 584 p.a.
• D)$125 000 p.a.

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Definitions:

Due Date

The specified date by which a task, assignment, payment, or project is expected or required to be completed or submitted.

Interest Due

The amount of interest payment that is owed but has not yet been paid at a particular date.

Maturity

This term refers to the date on which a financial obligation (such as a bond or loan) must be repaid in full.

Aging Of Receivables

A method used in accounting to estimate the amount of receivables that may not be collectible by categorizing them according to the length of time they have been outstanding.