Following is a table for the present value of $1 at compound interest:Year6%10%12%10.9430.9090.8930.8900.8260.79730.8400.7510.71240.7920.6830.6360.7470.6210.567Following is a table for the present value of an annuity of $1 at compound interest:Year6%10%12%10.9430.9090.8931.8331.7361.6902.6732.4872.40243.4653.1703.0374.2123.7913.605Using the tables provided, the present value of $13,265.00 (rounded to the nearest dollar) to be received at the end of each of thenext 4 years, assuming an earnings rate of 12%, isO a. $47,820Ob. $40,286Oc. $31,863Od. $13,265

Introduction:- Present Value Factor is used to calculate a present value of all the future value to…

Using the tables provided, the present value of $13,265.00 (rounded to the nearest dollar) to be received at the end of each of th next 4 years, assuming an earnings rate of 12%, is O a. $47,820 Ob. $40,286 Oc. $31,863 Od. $13,265

Using the tables provided, the present value of $13,265.00 (rounded to the nearest dollar) to be received at the end of each of th next 4 years, assuming an earnings rate of 12%, is O a. $47,820 Ob. $40,286 Oc. $31,863 Od. $13,265

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

100%

Following is a table for the present value of $1 at compound interest:
Year
6%
10%
12%
1
0.943
0.909
0.893
0.890
0.826
0.797
3
0.840
0.751
0.712
4
0.792
0.683
0.636
0.747
0.621
0.567
Following is a table for the present value of an annuity of $1 at compound interest:
Year
6%
10%
12%
1
0.943
0.909
0.893
1.833
1.736
1.690
2.673
2.487
2.402
4
3.465
3.170
3.037
4.212
3.791
3.605
Using the tables provided, the present value of $13,265.00 (rounded to the nearest dollar) to be received at the end of each of the
next 4 years, assuming an earnings rate of 12%, is
O a. $47,820
Ob. $40,286
Oc. $31,863
Od. $13,265

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