You have the opportunity to purchase mineral rights to a property in North Dakota with expected annual cash flows of $10,000 per year for eight years
If you discount these cash flows at a rate of 12% per year, what are these cash flows worth today if the cash flows occur at the end of each period?
A) $55,637.57
B) $49,676.40
C) $80,000.00
D) $122,996.93
Answer: B
Explanation: B)
PV = PMT × = $10,000 × = $49,676.40.
MODE = END
INPUT 8 12 ? -10,000 0
KEY N I/Y PV PMT FV
CPT 49,676.40
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