What Is the Present Value of the Following Uneven Stream

question 60

Multiple Choice

What is the present value of the following uneven stream of cash flows? Assume a 6% discount rate and end-of-period payments.Round to the nearest whole dollar.

• A)PV = $3,000/[1.06]¹ + $4,000/[1.06]² + $5,000/[1.06]³
• B)PV = $3,000[1.06]₁ + $4,000[1.06]² + $5,000[1.06]³
• C)PV = $3,000/[1.06]⁰ + $4,000/[1.06]¹ + $5,000/[1.06]²
• D)PV = $3,000[1.06]^-0 + $4,000[1.06]^-1 + $5,000[1.06]^-2

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Definitions:

Sherman Antitrust Act

A landmark federal statute passed in the United States in 1890 aimed at promoting economic competitiveness by prohibiting monopolies, cartels, and other forms of anticompetitive behavior.

Decreases Competition

When the number of competitors in the market diminishes, leading to less competition.

Robinson-Patman Act

A federal law in the United States designed to inhibit anticompetitive behaviors among producers by prohibiting price discrimination.

Cost Differences

Variations in the cost of producing or providing goods and services, often influenced by factors such as location, materials, and labor.