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    YvonneOzanne's Avatar
    YvonneOzanne Posts: 11, Reputation: 1
    New Member
    		  
    #1

    Jan 24, 2013, 03:16 PM
    What does "annual" in this problem mean?
    First of all, I do NOT want the answer to the problem. I just need clarification on the way it is worded. Here is the information:
    Calculate the present value of the following cash flows, rounding to the nearest dollar:
    b. An annual receipt of $16,000 over the next 12 years, discounted at a 14% rate of return.

    My question is: does annual receipt mean that $16,000 is being put in EACH year, or is the $16,000 what is expected to RECEIVE at the end of 12 years?

    Thanks in advance for any advice. I have searched everywhere I can for the clarification I seek!
    odinn7's Avatar
    odinn7 Posts: 7,691, Reputation: 1547
    Entomology Expert
    		  
    #2

    Jan 24, 2013, 03:19 PM
    The way I read it, sounds like you are expecting $16,000 per year.
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