Consider the following timeline: If the current market rate of interest is 13%, then the value of the cash flows in year 0 and year 2 as of year 1 is closest to ________.
A) $167.35
B) -$98.7
C) $98.7
D) -$70

Question

Consider the following timeline:  If the current market rate of interest is 13%, then the value of the cash flows in year 0 and year 2 as of year 1 is closest to ________.
A) $167.35 
B) -$98.7 
C) $98.7 
D) -$70

Quizplus · Accepted Answer

B) This is a two part problem involving both present and future values.
FV of 11ea84dc_f584_bd6c_9a63_15a58f66439b_TB1316_11_TB1316_11 PV of 11ea84dc_f584_bd6d_9a63_bf598ba1370f_TB1316_11_TB1316_11 So, the answer is 11ea84dc_f584_bd6e_9a63_8de5bc21ad75_TB1316_11_TB1316_11

Consider the Following Timeline: If the Current Market Rate