Assume That Your Required Rate of Return Is 12 Percent

question 11

Multiple Choice

Assume that your required rate of return is 12 percent and you are given the following stream of cash flows: If payments are made at the end of each period, what is the present value of the cash flow stream?

• A) $66,909
• B) $57,323
• C) $61,815
• D) $52,345
• E) $62,029

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Definitions:

Sarbanes-Oxley

A U.S. law enacted in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations, also known as the Sarbanes-Oxley Act.

Publicly Held Companies

Companies whose ownership is distributed among the general public through publicly traded shares or stocks.

Internal Control Environment

The overall attitude, awareness, and actions of directors, management, and personnel regarding internal controls and their importance in the organization.

Monitoring Policies

Procedures and guidelines established by an organization to systematically observe and assess the effectiveness of its policies and procedures.