What Is the Present Value (PV) of $90,000 Received Six

question 67

Multiple Choice

What is the present value (PV) of $90,000 received six years from now, assuming the interest rate is 5% per year?

• A) $58,500.00
• B) $57,085.48
• C) $67,159.39
• D) $117,528.93

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Definitions:

Net Income

The conclusive profit of a corporation once revenue has had taxes and expenses subtracted from it.

Common Stock

A type of equity security that represents ownership in a corporation, with holders possibly entitled to dividends and voting rights in some corporate matters.

Fair Value

A valuation of an asset or liability determined by the price it could fetch in a coordinated sale or cost of transferring the liability, through a fair transaction involving willing market players.

Net Book Value

The value of an asset after subtracting its accumulated depreciation or amortization from its cost.