Suppose That a Property Can Generate Cash Flows of $10,000

question 25

Multiple Choice

Suppose that a property can generate cash flows of $10,000 per year for eight years and can sell for $80,000 at the end of the investment period. Assuming a discount rate of 10%, what is the present value of this property (Assume end of period cash flows in your calculation) ?

• A) $117,320
• B) $160,000
• C) $133,349
• D) $90,670

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Definitions:

Cohort Sequential Design

A research design in which the longitudinal method is replicated with several cohorts.

Microgenetic Design

A research method in which individuals’ development is studied intensively over a relatively short period of time.

Cohort Sequential Design

A research method that combines cross-sectional and longitudinal designs to analyze different cohorts over time.

Cross-Sectional

A type of observational study that analyzes data from a population at a specific point in time.