At the end of the next four years, a new machine is expected to generate net cash
Question:
At the end of the next four years, a new machine is expected to generate net cash flows of $8,000, $12,000, $10,000, and $15,000, respectively. What are the (rounded) cash flows worth today if a 3% interest rate properly reflects the time value of money in this situation?
A. $32,400
B. $41,556
C. $39,982
D. $38,100
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Related Book For
Fundamental Accounting Principles
ISBN: 978-1259536359
23rd edition
Authors: John Wild, Ken Shaw, Barbara Chiappett
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The time value of money (TVM) is the concept that the money you have in your pocket today is worth more than the same amount would be if you received it in the future because of the profit it can earn during the interim.
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