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 11eaabab_c0c5_ff6a_b90e_95fe6c8065e4_TB5536_00 PV of 11eaabab_c0c5_ff6b_b90e_83f39873a2a9_TB5536_11 So, the answer is 11eaabab_c0c5_ff6c_b90e_172ecff8270e_TB5536_11

Consider the Following Timeline: If the Current Market Rate