Ambrin Corp

Multiple Choice

Ambrin Corp. expects to receive $2,000 at the end of each year for 10 years. Then the corporation expects to receive $3,500 per year for the following 10 years, at the end of each year. What is the approximate present value of this 20-year cash flow? Use an 8% discount rate.

A) $24,294
B) $27,870
C) $32,389
D) $2,547