You Expect to Receive $800 at the End of Each

question 96

Multiple Choice

You expect to receive $800 at the end of each of the next twenty years.What is the present value of the stream of payments if the interest rate is 6%?

• A) $9,175.94
• B) $9,411.26
• C) $9,305.38
• D) $9,687.79
• E) $9,550.30

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Definitions:

Price-Earnings Ratio

A financial metric that measures a company's current share price relative to its per-share earnings.

Net Operating Income

A company's income after operating expenses have been deducted, but before interest and taxes.

Market Price Per Share

The current price at which a single share of a company's stock is bought or sold on the market.

Return on Equity

A measure of financial performance calculated by dividing net income by shareholder's equity, indicating how effectively management is using a company’s assets to create profits.