What is the present value of the following cash flow stream at a rate of 12.0%?
A) $9,699
B) $10,210
C) $10,747
D) $11,284
E) $11,849

Question

What is the present value of the following cash flow stream at a rate of 12.0%? 
A) $9,699 
B) $10,210 
C) $10,747 
D) $11,284 
E) $11,849

Quizplus · Accepted Answer

To calculate the present value of the cash flow stream, we can use the formula:
PV = CF1/(1+r)^1 + CF2/(1+r)^2 + ... + CFn/(1+r)^n
where PV is the present value, CF is each cash flow amount, r is the discount rate, and n is the number of periods.

Using this formula, we can calculate the present value of the cash flow stream as:
PV = 2000/(1+0.12)^1 + 3000/(1+0.12)^2 + 4000/(1+0.12)^3 + 5000/(1+0.12)^4
PV = $10,747

Therefore, the best choice is C.

What Is the Present Value of the Following Cash Flow