What Is the Present Value of a Six-Year, $5,000 Per

question 65

Multiple Choice

What is the present value of a six-year, $5,000 per year annuity at a discount rate of 10 percent?

• A)$21,776.30
• B)$3,371.91
• C)$16,760.78
• D)$18,327.82

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Definitions:

Funds Flow

The movement of cash in and out of a business or financial system, reflecting its operational, financing, and investing activities.

Net Book Value

Net book value is the value at which an asset is carried on a balance sheet, equal to its cost minus accumulated depreciation and impairment charges.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a long-term asset from the time of its purchase to the reporting date.

Accumulated Depreciation

Accumulated depreciation represents the total amount of depreciation expense that has been recorded for an asset since its acquisition.