Which of the following cash flows has the highest present value (PV)at a 15 percent discount rate?
A)$1,150 received one year from today
B)$2,000 received 5 years from today
C)$200 received every year (at the end of the year)for 10 years
D)$300 received every year (at the end of the year)for 5 years

Question

Quizplus · Accepted Answer

The present value of $300 received every year for 5 years at a 15% discount rate is higher than the other options when calculated using the present value of an annuity formula.

Which of the Following Cash Flows Has the Highest Present