Consider the following timeline detailing a stream of cash flows: If the current market rate of interest is 10%,then the present value of this stream of cash flows is closest to:
A) $674
B) $600
C) $460
D) $287

Question

Consider the following timeline detailing a stream of cash flows:  If the current market rate of interest is 10%,then the present value of this stream of cash flows is closest to:
A) $674 
B) $600 
C) $460 
D) $287

Quizplus · Accepted Answer

C) PV = 100 / (1.10)¹ + 100 / (1.10)² + 200 / (1.10)³ + 200 / (1.10)⁴ = $460

Consider the Following Timeline Detailing a Stream of Cash Flows