Consider the Following Timeline Detailing a Stream of Cash Flows

question 28

Multiple Choice

Consider the following timeline detailing a stream of cash flows: If the current market rate of interest is 8%, then the future value (FV) of this stream of cash flows is closest to ________.

• A) $11,699
• B) $5850
• C) $14,039
• D) $18,718

---

Definitions:

Favored Customers

Customers who receive special benefits, discounts, or terms due to their status or relationship with a seller or service provider.

Rationing Mechanism

A system used to allocate scarce goods, services, or resources among people with competing needs or desires.

Tariff

A tax imposed by a government on goods and services imported from other countries, designed to raise revenue or protect domestic industries.

Imported Oil

Oil that is brought into a country from foreign sources for use in energy production, manufacturing, and other applications. It contrasts with domestically produced oil.