You Are Considering a Project Which Will Provide Annual Cash

question 15

Multiple Choice

You are considering a project which will provide annual cash inflows of $4,500,$5,700,and $8,000 at the end of each year for the next three years,respectively.What is the present value of these cash flows,given a 9 percent discount rate?

• A)$14,877
• B)$15,103
• C)$15,429
• D)$16,388
• E)$16,847

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Definitions:

Compounded Monthly

A method where interest is calculated monthly and added to the principal sum, resulting in interest on interest.

Periodic Interest Rate

The interest rate charged or paid over a specific period of time, often expressed as a percentage.

Payment Interval

The scheduled period between payments made by a borrower or payer to a lender or payee.

Compounded Quarterly

A financial calculation where interest is added to the principal four times a year, resulting in an increased amount on which subsequent interest calculations are based.