Consider the Following Timeline Detailing a Stream of Cash Flows

question 60

Multiple Choice

Consider the following timeline detailing a stream of cash flows: If the current market rate of interest is 10%, then the present value (PV) of this stream of cash flows is closest to ________.

• A) $10,114
• B) $20,227
• C) $24,272
• D) $32,363

---

Definitions:

Operating Activities

The day-to-day actions that are involved in running a business and generating revenue, such as selling products or services.

Indirect Method

In financial accounting, this method is used to prepare the cash flow statement, adjusting net income for changes in non-cash accounts to calculate cash flow from operating activities.

Operating Activities

Activities related directly to the production, sale, and delivery of a company's products and services, as reflected in its cash flow.

Cash Collected

The total amount of money received by a company from its various sources during a particular period, including sales, investments, and financing activities.