What Is the Present Value of the Following Set of Cash

Multiple Choice

What is the present value of the following set of cash flows at an interest rate of 7 percent; $1,000 today, $2,000 at end of year one, $4,000 at end of year three, and $6,000 at end of year five?

A) $9,731
B) $10,412
C) $10,524
D) $11,524 PV = $1,000/(1.07) ⁰ + $2,000/(1.07) ¹ = $4,000/(1.07) ³ + $6,000/(1.07) ⁵
= $1,000 + 1,869.16 + 3,265.19 + 4,277.92