Watson Limited Acquires the Net Assets of Lake Limited for a Cash

Multiple Choice

Watson Limited acquires the net assets of Lake Limited for a cash consideration of $160 000. One half is to be paid on acquisition date and the other half is payable in one year's time. The appropriate discount rate is 8% p.a. The present value of the cash outflow in one year's time is:

A) $800 000
B) $74 072
C) $86 402
D) $72 728