What is the present value of the following cash flow stream at a rate of 8.0%?
A) $7,917
B) $8,333
C) $8,772
D) $9,233
E) $9,695

Question

What is the present value of the following cash flow stream at a rate of 8.0%? 
A) $7,917 
B) $8,333 
C) $8,772 
D) $9,233 
E) $9,695

Quizplus · Accepted Answer

To calculate the present value, we use the formula PV = CF/((1+r)^n) where PV is the present value, CF is the cash flow, r is the discount rate, and n is the number of periods. Using this formula, we get:

PV = 1000/(1+0.08)^1 + 1500/(1+0.08)^2 + 2000/(1+0.08)^3 + 2500/(1+0.08)^4 + 3000/(1+0.08)^5
PV = $9,233. Therefore, the answer is D.

What Is the Present Value of the Following Cash Flow