The future value of $100 received today and deposited at 6 percent for four years is A) $126 B) $ 79 (Assume annual compounding) $124 D) $116 The present value of $100 to be received 10 years from today, assuming an opportunity cost of 9 percent, in A) $236 B) $699 C) $ 42 : DS 75. 2. 3. The present value of a $25,000 perpetuity at a 14 percent discount rate is A) $178,571 B) $285,000 C) $350,000 D) $219,298 4. If the present value of a perpetual income stream is increasing, the discount rate must be A) increasing B) decreasing C) changing unpredictably D) increasing proportionally Mary will receive $12,000 per year for the next 10 years as royalty for her work on a finance book. What is the present value of her royalty income if the opportunity cost is 12 percent? A) $120,000 B) $ 67,800 c) $ 38,640 D) $ 72,560 You have been offered a project paying $300 at the beginning of each year for the next 20 years. What is the maximum amount of money you would invest in this project if you expect 9 percent rate of return to your investment? A) $ 2,738 B) $ 2,985 C) $15,347 D) $ 6,000 $100 is received at the beginning of year 1, $200 is received at the beginning of year 2, and $300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is A) $1,536 B) $ 672 C) S 727 D) $1,245