What Is the Present Value (PV) of the Following Series $\begin{array}{lc}\text { Year } & \$ \\\hline 1 & 500 \\2 & 300 \\3 & 0 \\4 & 400 \\5 & 400\end{array}$

question 67

Multiple Choice

What is the Present Value (PV) of the following series of cash flows using an 8% discount rate? $\begin{array}{lc}\text { Year } & \$ \\\hline 1 & 500 \\2 & 300 \\3 & 0 \\4 & 400 \\5 & 400\end{array}$

• A) Less than $1200
• B) $1201 - $1250
• C) $1251 - $1300
• D) $1301 - $1350
• E) More than $1350

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Definitions:

Par Common Stock

The face value of common stock as stated in the corporate charter, which is the minimum amount at which shares can initially be sold.

Par Preferred Stock

A type of preferred stock that is issued at its nominal or face value, and typically has a fixed dividend rate.

Debit to Cash

An accounting entry that increases the cash balance in a company's books.

Paid-In Capital

The total amount of money investors have contributed to a company in exchange for equity.