What Is the Present Value of the Following Cash Flow

question 26

Multiple Choice

What is the present value of the following cash flow stream,discounted at 6.5% per annum,compounded monthly?
Year 1:
$1000; Year 2:
$1500; Year 3:
$2000; Year 4:
$2500

• A) $5844.58
• B) $5863.11
• C) $5874.79
• D) $5986.23

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Definitions:

Sequential

Pertaining to events, processes, or items that follow one after another in a specific order.

Longitudinal

A type of study or analysis that follows the same subjects over a period of time to observe changes or developments.

Cross-sectional

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

Erikson's Stages

A series of eight stages through which a healthily developing human should pass from infancy to late adulthood, each stage marked by a psychological crisis.