Consider the Following Timeline Detailing a Stream of Cash Flows

question 81

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 of this stream of cash flows is closest to:

• A)$674
• B)$600
• C)$460
• D)$287

---

Definitions:

Calculator

An electronic device or software used for performing mathematical operations.

Inverse Function

A function that reverses the effect of the original function, such that applying both the function and its inverse will return the original input.

Graph

A drawing that portrays the network of relations or connections between various items through the use of distinct features like dots, lines, and bars.

Inverse Function

A function that reverses the operations of a given function, such that applying both functions in succession results in the original value.