Below is a table for the present value of $1 at compound interest. Year 6% 10% 12%
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Question:
Below is a table for the present value of $1 at compound interest.
Year | 6% | 10% | 12% |
---|---|---|---|
1 | 0.943 | 0.909 | 0.893 |
2 | 0.890 | 0.826 | 0.797 |
3 | 0.840 | 0.751 | 0.712 |
4 | 0.792 | 0.683 | 0.636 |
5 | 0.747 | 0.621 | 0.567 |
Below is a table for the present value of an annuity of $1 at compound interest.
Year | 6% | 10% | 12% |
---|---|---|---|
1 | 0.943 | 0.909 | 0.893 |
2 | 1.833 | 1.736 | 1.690 |
3 | 2.673 | 2.487 | 2.402 |
4 | 3.465 | 3.170 | 3.037 |
5 | 4.212 | 3.791 | 3.605 |
Using the tables above, if an investment of $20,000 would generate an annual cash inflow of $80,000 for the next four years, what would be the net present value?
a.6%
b.12%
c.10%
d.14%
Related Book For
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
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