Cora Company will receive $10,000 in 5 years. If the relevant interest rate is 10%, what is the present value of this receipt?
A)$ 5,000
B)$ 6,209
C)$ 7,500
D)$10,000

Question

Quizplus · Accepted Answer

The present value can be calculated using the formula: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the interest rate, and n is the number of years. Plugging in the values, we get: PV = 10,000 / (1 + 0.1)^5 = $6,209. Option B is the closest answer.

Cora Company Will Receive $10,000 in 5 Years