Question
We wish to discount $1,000 to be received in 5 years. Which of the following is TRUE about using the function =PV(rate,nper,pmt,[fv],[type]) if the rate
We wish to discount $1,000 to be received in 5 years. Which of the following is TRUE about using the function =PV(rate,nper,pmt,[fv],[type]) if the rate is specified as an annual rate of 0.05 and nper is 5? (need to use excel)
a. We cannot use the PV function as it can only be used to discount multiple cash flow payments not a single cashflow.
b. To use the PV function to discount a single cashflow we would specify 'pmt' as zero, and 'fv' as the single amount we wish to discount.
c. To use the PV function to discount a single cashflow we would specify 'pmt' as that single amount, $1,000, and 'fv' as zero.
d. To use the PV function to discount a single cashflow we would specify 'pmt' as that single amount, $1,000, and would leave the 'fv' blank as it is not required.
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