Question: 11. For the image below, why do years 1-5 indicate a positive number? Please explain your answer. Compounding Future Value Year 0 2 3 4

11. For the image below, why do years 1-5 indicate a positive number? Please explain your answer. Compounding Future Value Year 0 2

11. For the image below, why do years 1-5 indicate a positive number? Please explain your answer. Compounding Future Value Year 0 2 3 4 5 -$15,000 $3,000 $5,000 $4,000 $3,000 $2,000 Present Value Discounting 19. In the following image Year 0 is shown to have a value of -$15,000. Why is Year 0 a negative amount? 7 Introduction to Corporate Finance Fall 2021 Midterm Exam Compounding Future Value 2 Year 3 5 -$15,000 $3,000 $5,000 $4,000 $3,000 $2,000 Present Value Discounting a. Year O is a negative amount because the present value is zero. b. Year O is a negative amount because it represents the current year (Year 0) outflow (the company is paying out $15,000) that the company has to make. c. Year 0 is a negative amount as it represents the future value calculated to present value. d. Year 0 is a negative amount because it represents the negative affect of not compounding The chart is wrong. e

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