Use This Information to Answer the Following Question What Is the Present Value of Receiving $400 at the |

question 21

Multiple Choice

Use this information to answer the following question. $$\begin{array} { | c | c | c | } \hline \text { Periods } & \text { Present Value af } 1 \text { at } 7 \text { Percent } & \text { Present Value af Ordinary Annuity af } \\&&\text { \$1 at } 7 \text { Percent } \\1 & 0.935 & 0.935 \\\hline 2 & 0.873 & 1.808 \\\hline 3 & 0.816 & 2.624 \\\hline\end{array}$$ What is the present value of receiving $400 at the end of each year for three years?

• A) $1,122.00
• B) $326.40
• C) $979.20
• D) $1,049.60

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Definitions:

Withdrawal

The act of taking money from an account, or the removal of assets or resources, often applicable in banking and partnerships.

Telephone Bill

A telephone bill is a periodic charge levied on individuals or businesses for the use of telecommunication services.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, leading to net profit or loss.