Interest rates in the economy are 8% per year for the one-year horizon and 10% per year for the two-year horizon. You expect a cash flow of 500$ one year from know and another 500$ two years from now. What is the present value of the cash flows you expect?

a.

912$

b.

892$

c.

1,000$

d.

779$

e.

867$

f.

818$

g.

899$

h.

876$