Jiminez Company Has Two Investment Opportunities What Is the Total Present Value of Investment A's Cash

question 143

Multiple Choice

Jiminez Company has two investment opportunities.Both investments cost $5,000 and will provide the following net cash flows: $$\begin{array} { l r r } \text { Year } & \text { Irvestrnent A } & \text { Irvestrnent B } \\1 & \mathbf {\$ 3 , 0 0 0 } & \mathbf {\$ 3 , 0 0 0 } \\2 & \mathbf { 3 , 0 0 0 } & 4,000 \\3 & \mathbf { 3 , 0 0 0 } & 2,000 \\4 & \mathbf { 3 } , 000 & 1,000\end{array}$$ What is the total present value of Investment A's cash flows assuming an 8% minimum rate of return? (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.Do not round your intermediate calculations.Round your answer to the nearest whole dollar.)

• A) $14,936.
• B) $4,936.
• C) $7,000.
• D) $12,000.

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Definitions:

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The quality or state of being in accord with fact or reality, free from falsehood or distortion.

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