If the cost of capital is 7.9% per year, what is the discount factor for a cash flow occurring in 7 years?
A. 0.4470 |
B. | 0.5873 |
C. | 1.7027 |
D. | 0.9210 |
B.0.5873
Working:
Discount factor for a cash flow occurring in 7 years | = | (1+i)^-n | Where, | |||||||
= | (1+0.079)^-7 | i | 0.079 | |||||||
= | 0.5873 | n | 7 | |||||||
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