Present Value of 1 Future Value of 1

question 9

Multiple Choice

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Russell Company has acquired a building with a loan that requires payments of $20,000 every six months for 5 years. The annual interest rate on the loan is 12%. What is the present value of the building?

• A)$72,096
• B)$113,004
• C)$147,202
• D)$86,590
• E)$200,000

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Definitions:

Financial Statements

Reports that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement, at a particular point in time.

Common Dividends

Payments made to shareholders of a company's common stock, representing a portion of the company’s earnings distributed to its owners.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.

EVA

Economic Value Added, a measure of a company's financial performance based on the residue wealth calculated by deducting its cost of capital from its operating profit.