Consider the Following Timeline Detailing a Stream of Cash Flows

question 9

Multiple Choice

Consider the following timeline detailing a stream of cash flows:
If the current market rate of interest is 8%,then the future value (FV) of this stream of cash flows is closest to:

• A)$11,699
• B)$10,832
• C)$12,635
• D)$10,339

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Definitions:

Perpetual Inventory System

An inventory management system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Automobile Dealership

A business that sells new or used cars at the retail level, based on a dealership contract with an automaker.

Likely Used

Refers to items or methods that are commonly adopted or employed due to their effectiveness or efficiency.

Gross Profit

The amount by which sales revenue exceeds the cost of goods sold, prior to subtracting expenses such as overheads, payroll taxes, and interest.