What Is the Value Today of Receiving Five Annual Payments

question 9

Multiple Choice

What is the value today of receiving five annual payments of $500,000,beginning one year from now,assuming an 11% discount rate?

• A)$2,500,000.
• B)$2,225,000.
• C)$1,847,950.
• D)$2,115,270.

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Definitions:

Enzyme

Biological molecules that significantly speed up the rate of virtually all of the chemical reactions within cells.

Catalyzes

To increase the rate of a chemical reaction without undergoing any permanent chemical change, often pertaining to the action of enzymes.

Cofactor

A non-protein chemical compound or metallic ion that is required for a protein's biological activity to occur.

Enzymes

Substances of biological origin that greatly enhance the speed of most chemical interactions happening in cellular environments.