The Present Value of £8,000 to Be Received Each Year

question 60

Multiple Choice

The present value of £8,000 to be received each year for ten years and earning a 16 per cent return is

• A)£1,655.
• B)£1,816.
• C)£35,242.
• D)£38,664.

---

Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset since it was put into use, reducing its book value.

Investing Activity

Financial transactions related to the acquisition or disposal of long-term assets and investments, reflected in a company's cash flow statement.

Indirect Method

A method used in cash flow statements to adjust net income for non-cash transactions and changes in working capital to calculate net cash provided by operating activities.

Amortization

The gradual reduction of a debt or the cost of an intangible asset over a specific period of time, typically through regular payments.