What Is the Present Value (PV)of an Investment That Pays

question 59

Multiple Choice

What is the present value (PV) of an investment that pays $15 000 every year for three years if the interest rate is 5% APR, compounded quarterly?

• A)$45 000
• B)$40 700
• C)$40 760
• D)$38 680

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Definitions:

Days' Cash

A measure of a company's financial flexibility, indicating the number of days the company can continue to operate using only its cash on hand, without additional income or financing.

Petty Cash

Petty cash is a small amount of cash on hand used for paying expenses too small to merit writing a check or using a credit card.

Miscellaneous Expense

Expenses that are not classified under any standard expense categories within the accounting system, often of a small or irregular nature.

Days' Cash

A measure of a company's financial stability, indicating how many days the company can continue to operate using only its available cash without needing additional income.