Problem:
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.
Required:
Question: 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?
Select one:
a. $49,676.40
b. $80,000.00
c. $122,996.93
d. $55,637.57
Note: Show supporting computations in good form.