A Business Is Expected to Generate the Following Cash Flows $\begin{array}{ll}\text { Year }& \text { Cash Fiow } \\1 & \$ 10,000 \\2 & \$ 15,000 \\3 & \$ 30,000 \\4 & \$ 40,000\end{array}$

question 186

Multiple Choice

A business is expected to generate the following cash flows over the next five years after which it will be dissolved. How much is the business worth today if the interest rate is 8%? $\begin{array}{ll}\text { Year }& \text { Cash Fiow } \\1 & \$ 10,000 \\2 & \$ 15,000 \\3 & \$ 30,000 \\4 & \$ 40,000\end{array}$

• A) $77,615
• B) $68,304
• C) $75,333
• D) $100,025

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Definitions:

Removal

The process of moving or eliminating something from a certain place or context.

User Cost

The cost of using a good or service, considering both the expense of use and the opportunity cost of not using an alternative.

Extraction Cost

The expenses associated with removing natural resources from the earth, such as mining, drilling, or harvesting.

Gold Bars

Solid bars of gold, typically standardized in weight, that are bought, sold, and stored as investment and reserve assets.