A company anticipates a taxable cash receipt of $20,000 in year 3 of a project.The company's tax rate is 30%,and its discount rate is 8%.What is the approximate present value of this future cash flow? (Do not round your intermediate calculations and round the final answer to the nearest whole dollar.)

Question

Quizplus · Accepted Answer

To calculate the present value of the future cash flow, we need to use the formula PV = FV / (1+r)^n, where PV is the present value, FV is the future value, r is the discount rate, and n is the number of periods. In this case, the future value is $20,000, the discount rate is 8%, and the number of periods is 3. Therefore, PV = $20,000 / (1+0.08)^3 = $11,114. Therefore, the best choice is C.

A Company Anticipates a Taxable Cash Receipt of $20,000 in Year