What is the most you should pay to receive the following cash flows if your required rate of return is 12 percent?
A) $58,580
B) $104,135
C) $68,105
D) $40,000

Name: What is the most you should pay to receive the following cash flows if your required rate of return is 12 percent? A) $58,580 B) $104,135 C) $68,105 D) $40,000
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Question

What is the most you should pay to receive the following cash flows if your required rate of return is 12 percent? 
A) $58,580 
B) $104,135 
C) $68,105 
D) $40,000

Quizplus · Accepted Answer

Solution:
PV =$ 5,000(0.893) + $8,000(0.797) + $12,000(0.712) + $15,000(5.650 - 2.402) = $68,105

What Is the Most You Should Pay to Receive the Following