A Firm Will Give a One-Time Cash Flow of $22,000

question 30

Multiple Choice

A firm will give a one-time cash flow of $22,000 after one year.If the project risk requires a return of 11%,what is the levered value of the firm with perfect capital markets?

• A)$18,182
• B)$20,000
• C)$19,820
• D)more information needed

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Definitions:

Installment Plan

A method of payment for goods or services in which a customer agrees to pay the price in periodic installments over a set period of time.

Statute of Limitations

The legal time limit within which a lawsuit or criminal charge must be filed after an alleged offense or harm.

Consequential Damages

Indirect damages that can be recovered if they were reasonably foreseeable at the time the contract was made and result from a party's breach of contract.

UCC

Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, including sales, leases, negotiable instruments, and secured transactions.