Find the Present Value of the Following Stream of Cash

question 23

Multiple Choice

Find the present value of the following stream of cash flows assuming an opportunity cost of 9 percent.

• A)$85,791
• B)$187,838
• C)$65,213
• D)$79,345

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Definitions:

Additional Paid-In Capital

The amount of equity capital that is more than the par value of issued shares, representing additional investment from shareholders.

Stock Dividend

A distribution of additional shares of a company's stock to its shareholders, usually in lieu of cash dividends.

Cash Dividends

Direct payments of profit made to shareholders, proportionate to the number of shares they own.

Treasury Stock

Shares that were first put into circulation by a company and then taken back, diminishing the quantity of shares actively traded on the market.