What Is the Present Value (PV) of $50,000 Received Twenty

question 31

Multiple Choice

What is the present value (PV) of $50,000 received twenty years from now, assuming the interest rate is 6% per year?

• A) $32,500.00
• B) $13,251.70
• C) $15,590.24
• D) $27,282.92

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Definitions:

Free Cash Flow

The amount of cash generated by a company after accounting for capital expenditures necessary to maintain or expand the asset base.

Market Capitalization Rate

The expected return on an investment in a company, based on its current market capitalization and future profit projections.

FCFE

Free Cash Flow to Equity, a measure of how much cash is available to the equity shareholders of a company after all expenses, reinvestment, and debt payments.

Intrinsic Value

Intrinsic Value is the actual value of a company, stock, currency, or product determined through fundamental analysis without reference to its market value.