If the Interest Rate Is 10 Percent and Cash Flows

question 88

Multiple Choice

If the interest rate is 10 percent and cash flows are $1,000 at the end of year one and $2,000 at the end of year two,then the present value of these cash flows is:

• A) $2,562.
• B) $3,200.
• C) $439.
• D) $3,000.

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Definitions:

Greenhouse Gases

Gases in the Earth's atmosphere that trap heat, contributing to global warming and climate change.

Global Warming

The ongoing rise in average global temperatures, mainly attributed to human activities such as burning fossil fuels, leading to climate change and associated environmental impacts.

Ramifications

Consequences or outcomes that result from an action or decision.

Coal Burning

The combustion of coal as a method to generate electricity or heat, contributing to air pollution, including the release of carbon dioxide and other harmful emissions.