You Have Been Accepted into a Prestigious Private University in Southern

question 27

Multiple Choice

You have been accepted into a prestigious private university in Southern California - congratulations! Since no one from this school has ever graduated in only four years,you anticipate that you will need to make 10 semi-annual tuition payments of $25,000 each with the first cash flow six months from today.If you choose to discount these cash flows at an annual rate of 6%,what is the present value cost of tuition to attend your university of choice?

• A)$186,814.54
• B)$184,002.18
• C)$250,000.00
• D)$213,255.07

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Definitions:

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.

Flows of Money

The movement of money between entities in an economy, including spending, investing, and financing activities.

Overstated Accounts

Financial accounts or records reported with higher values than they actually possess, often leading to a misrepresentation of financial health.

Transactions

Acts of buying, selling, or exchanging goods, services, or financial assets in the course of business.