CIMA BA1 · Chapter 13 · Question 4 of 10
What is the present value of $12,000 receivable in three years' time if the discount rate is 8% a year (to the nearest cent)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) $9,525.99
Explanation
PV = future value / (1 + r)^n = 12,000 / 1.08^3 = 12,000 / 1.259712 = $9,525.99.
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