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NEW QUESTION: 1
If you were to receive $100 per year for the next 10 years, starting today, and the discount rate applicable is 9% per year, what's the value of this stream of cash flows to you?
A. $700
B. $642
C. $678
D. $600
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Since you receive one payment today, the stream of cash flow equals $100 plus a 9-year ordinary annuity.
The value of the annuity today = (100/0.09)*(1 - 1/(1.09