An Investment Pays $400 in One Year,X Amount of Dollars

question 25

Multiple Choice

An investment pays $400 in one year,X amount of dollars in two years,and $500 in three years. The total present value of all the cash flows (including X) is equal to $1,500. If i is 6 percent,what is X?

• A)$702.83
• B)$822.41
• C)$789.70
• D)$749.67
• E)$600.00

---

Definitions:

Owner Financing

A method of financing in which the seller of a property provides a loan to the buyer directly, often with flexible terms.

Creditors Or Lenders

Individuals or institutions that lend money or extend credit to others, with the expectation of being repaid with interest.

Revenues

The total amount of money received by a company for goods sold or services provided during a certain period of time.

Equity

The value of an ownership interest in property, including shareholders' equity in a corporation, representing assets minus liabilities.