(Ignore Income Taxes in This Problem

question 6

Multiple Choice

(Ignore income taxes in this problem.) In order to receive $12,000 at the end of three years and $10,000 at the end of five years,how much must be invested now if you can earn 14% rate of return?

• A) $12,978
• B) $8,100
• C) $13,290
• D) $32,054

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Definitions:

Outstanding Checks

Checks that have been issued and recorded in the issuing party's records but have not yet been cashed or cleared by the bank.

Deposits in Transit

Deposits in transit are amounts that have been received and recorded by a business but have not yet been reflected in the bank's records.

Bank Reconciliation

The act of reconciling the cash account balances recorded in an organization's bookkeeping with the related data found on a bank statement.

Deposits in Transit

Funds that have been received and recorded by a business but not yet processed by the bank.