Assume That Your Required Rate of Return Is 12% and You

question 29

Multiple Choice

Assume that your required rate of return is 12% and you are given the following stream of cash flows:

If payments are made at the end of each period,what is the present value of the cash flow stream? (Round to the nearest whole dollar)

• A) $66,909
• B) $57,323
• C) $61,815
• D) $52,345
• E) $62,029

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Definitions:

Periodic Inventory System

An inventory system in which the inventory count and the cost of goods sold calculation are performed at set intervals, typically at the end of an accounting period.

Periodic Inventory System

An inventory accounting system where updates are made on a periodic basis, rather than continuously, often used for calculating cost of goods sold at the end of an accounting period.

Sales Returns & Allowances

Reductions in sales revenue for products returned by customers or allowances given for damaged goods.

Merchandise Inventory

Goods that a company holds for the purpose of selling to customers in the ordinary course of business.