At a discount rate of 10% per annum, what is the present value of Rs. 5,000 payable after one year and Rs. 8,000 payable after two years?
Correct answer: C. Rs. 11,157.02
- A. Rs. 10,500.00
- B. Rs. 11,000.00
- C. Rs. 11,157.02
- D. Rs. 11,300.00
Explanation
Each cash flow is discounted to the present separately. The value is 5,000 divided by 1.10 plus 8,000 divided by 1.10^2, which equals approximately Rs. 11,157.02.
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