Suppose That an Income Producing Property Is Expected to Yield

Multiple Choice

Suppose that an income producing property is expected to yield cash flows for the owner of $10,000 in each of the next five years, with cash flows being received at the end of each period. If the opportunity cost of investment is 12% annually and the property can be sold for $100,000 at the end of the fifth year, determine the value of the property today.

A) $36, 047.76
B) $56,742.69
C) $83,333.33
D) $92,790.45