If the Appropriate Discount Rate for the Following Cash Flows

question 107

Multiple Choice

If the appropriate discount rate for the following cash flows is 11.7 percent per year,what is the present value of the cash flows?

• A)$71,407.19
• B)$74,221.80
• C)$78,270.77
• D)$80,407.16
• E)$81,121.03

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Definitions:

Probability

The likelihood or chance of an event occurring.

Poisson Distribution

A probability distribution that models the number of events occurring in a fixed interval of time or space, given the events occur with a known constant rate and independently of the time since the last event.

Post Office

A public institution responsible for the collection, sorting, transport, and delivery of mail.

Probability

The quantification of how likely an event is to occur, expressed as a number ranging between 0 and 1.