Using the tables above, what is the present value of $6,000 to be received at the end of each of the next four years, assuming an earnings rate of 10%? a. $20,790
b. $19,020
c. $14,412
d. $25,272
1. Option A
2. Option B
3. Option C

b. $19,020

Explanation:

Note: This question is not complete. The complete question is therefore provided in the attached pdf file before answering the question. Please, see the attached file for the full question.

Also note that the "1. Option A 2. Option B 3. Option C" are not actually part of the question.

The explanation to the answer is now provided as follows:

Note: This is an example of annuity. An annuity can be described as a series of payments made or income received at equal intervals.

Therefore, the relevant table in the question is the second table, i.e. table for the present value of an annuity of $1 at compound interest.

To calculate the present value (PV), the following for formula is used:

PV = ACI * PVA10% (1)

PV = Present value = ?

ACI = Annual cash inflows = $6,000

PVA = Present value of annuity of $1 at 10% for 4 years = 3.170

Note that the PVA is obtained for year 4 at 10% from the second table as already explained above.

Substituting the values into equation (1), we have:

PV = $6,000 * 3.170

PV = $19,020

Therefore, the correct option is option b. $19,020.

the answer is true

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