Calculate the Present Value of the Following Cash Flows Assuming

question 4

Multiple Choice

Calculate the present value of the following cash flows assuming they occur at the end of each year and the interest rate is 12% p.a.:
Year 0,($12 000) ;Year 1,$5670;Year 2,$11 250.

• A)$2030.93
• B)$26 030.93
• C)$28 920
• D)($1163.19)

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Definitions:

Balance Sheet

A financial statement that summarizes a company’s assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Inventory System

The methods and technologies used to keep track of the types, quantities, and locations of products a company has in stock.

Perpetual

Referring to a continuous inventory system where updates are made in real-time following each sale or purchase transaction.

Revenue

The total amount of money received by a company from its business activities, such as sales of goods or services, before any expenses are subtracted.