How Much Would $5,000 Due in 25 Years Be Worth

question 138

Multiple Choice

How much would $5,000 due in 25 years be worth today if the discount rate were 5.5%?

• A)$1,067.95
• B)$1,124.16
• C)$1,183.33
• D)$1,245.61
• E)$1,311.17

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Definitions:

Cash Flow

Cash flow refers to the total amount of money being transferred into and out of a business, especially regarding liquidity.

Noncash Charge

Expenses recorded on the income statement that do not involve a direct cash outflow, such as depreciation, amortization, and impairments.

Reporting Standards

These are formal guidelines that dictate the financial reporting process, ensuring the accuracy, consistency, and transparency of financial statements.

International Financial Reporting Standards (IFRS)

A set of accounting standards designed to bring consistency to accounting language, practices, and statements across the globe.