Which of the following is true about finding the present value of cash flows? Finding present value tells you what a cash flow will be worth in future years. Finding the present value of cash flows is important for financial theory, but it does not have much relevance to actual business decision making. Finding the present value of cash flows in future years tells you how much you would need to invest today so that it would grow to equal the given future amount. What is the value today of a $87,000 cash flow expected to be received 17 years from now based on an annual interest rate of 6%? Your broker called earlier today and offered you the opportunity to invest in a security. As a friend, he suggested that you compare the current, or present value, cost of the security and the discounted value of its expected future cash flows before deciding whether or not to invest. The decision rule that should be used to decide whether or not to invest should be: Everything else being equal, you should invest if the current cost of the security is greater than the present value of the security's expected future cash flows. Everything else being equal, you should invest if the present value of the security's expected future cash flows is less than the current cost of the security. Everything else being equal, you should invest if the discounted value of the security's expected future cash flows is greater than or equal to the current cost of the security. Everything else being equal, you daunted value of the flows is greater than or equal to the current cost of the security. Now that you've thought about the decision rule that should be applied to your decision, apply it to the following security offered by your broker: Jing Associates, LLC, a large law firm in Denver, is building a new office complex. To pay for the construction, Jing Associates is selling a security that will pay the investor the lump sum of $17,500 in six years. The current market price of the security is $12,372. Assuming that you can earn an annual return of 6.75% on your next most attractive investment, how much is the security worth to you today? From strictly a financial perspective, should you invest in the Jing security? No Yes Why or why not? Because the discounted value of the security's future cash flows is greater than the cost of the security. Because the cost of the security is greater than the discounted value of the security's future cash flows. You have a partnership stake in a business that pays you equal payments of $1,000 at the end of each year for the next six years. If the annual interest rate stays constant at 5%, what is the value of these payments in today's dollars? Round your answer to the nearest whole dollar. You found out that now you are going to receive payments of $7,500 for the next 13 years. You will rece.ve these payments at the beginning of each year. The annual interest rate will remain constant at 12%. What ,s the present value of these payments' Round your answer to the nearest whole dollar. Your goal is to have $12,500 in your bank account by the end of six years. If the interest rate remains constant at 5% and you want to make annual identical deposits, how much will you need to deposit in your account at the end of each year to reach your goal? If your deposits were made at the beginning of each year rather than an at the end, by how much would the am, of your deposit change if you still wanted to reach your goal by the end of six years