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Seneca College *

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440

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Finance

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Nov 24, 2024

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pdf

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2

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11/20/23, 7:38 AM Chapter 8 Quiz https://www.ameengage.com/mod/quiz/review.php?attempt=4684769&cmid=1260535&page=9 1/2 English (en) English (en) Français - Canada (fr_ca) Dashboard / My courses / [Seneca 09/2023] HTM440NHA - Nardi / CHAPTER 8 - Capital Budgeting and Investment Decisions / Chapter 8 Quiz Question 10 Correct Mark 1.00 out of 1.00 If you are to receive payments of $2,000 annually for five consecutive years, what is the present value of the total payments assuming that the interest rate is 9%? Select one: a. $7,779.30 b. $6,499.00 c. $1,299.80 d. $8,205.50 Your answer is correct. Explanation: The present value annuity factor for 9% in 5 years is 3.8897. Therefore, the present value of all the payments is $7,779.40 ($2,000 x 3.8897). Note that this amount could have also been derived using the PV function in Excel as follows: =PV(9%,5,2000,0,0)=$7,779.30 The correct answer is: $7,779.30
11/20/23, 7:38 AM Chapter 8 Quiz https://www.ameengage.com/mod/quiz/review.php?attempt=4684769&cmid=1260535&page=9 2/2 Français (fr)
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