Compute the Present Value of an Ordinary Annuity That Pays

question 143

Multiple Choice

Compute the present value of an ordinary annuity that pays $11,000 per year for 15 years at 7%.
Present value of annuity of $1:

• A)$100,188
• B)$100,921
• C)$99,418
• D)$100,958

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Definitions:

Current Ratio

Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations by comparing current assets to current liabilities.

Accounts Receivable

Funds that are to be paid to a business by its customers for the provision of goods or services that have already been delivered or used, but have not been paid for.

Equity Multiplier

A financial ratio that measures the proportion of a company’s assets that are financed by stockholders' equity, indicating the level of debt financing.

New Equity

Funds raised by a company through the issuance of shares to the public or to specific investors.