A Company Wants to Have $40,000 at the End of a Five-Year

Multiple Choice

A company wants to have $40,000 at the end of a five-year period through investment of a single sum now. How much needs to be invested in order to have the desired sum in five years, if the money can be invested at 10% (Ignore income taxes.) ? Use Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. (Round your intermediate calculations to 3 decimal places.)

A) $10,551
B) $8,000
C) $24,840
D) $12,882