Mary will receive $12,000 per year for the next ten years as royalty for her work on a finance book.What is the present value of her royalty income if the opportunity cost is 12 percent? (Round to the nearest whole dollar)
A) $120,114
B) $67,803
C) $65,640
D) $56,793

Question

Quizplus · Accepted Answer

PV = PMT × 11ea7fdb_fc1b_14da_a768_6368f197ad70_TB2902_00 PV = 12,000 × 11ea7fdb_fc1b_14db_a768_d108bb1aa100_TB2902_00 = $67,802.68
Using a financial calculator:
N = 10, I/Y = 12, PMT = -12,000, FV = 0, cpt PV = $67,802.68

Mary Will Receive $12,000 Per Year for the Next Ten