(Appendix 8A)(Ignore income taxes in this problem. )Assume you can invest money at a 14% rate of return.How much money must be invested now in order to be able to withdraw $5, 000 from this investment at the end of each year for 8 years, the first withdrawal occurring one year from now?
A)$24, 840
B)$23, 195
C)$21, 440
D)$1, 755

Question

Quizplus · Accepted Answer

PV = $5, 000 × Present value of an annuity of $1 over 8 years at 14%
= $5, 000 × 4.639 = $23, 195

(Appendix 8A)(Ignore Income Taxes in This Problem