A project generates a net cash flow of $200 annually for 4 years, with no income afterward. If the discount rate is 5%, what is the present value of this income stream over the 4-year period?

Explanation

The total undiscounted sum is $200 × 4 = $800. Since the discount rate is 5%, the present value will be slightly less than $800 but close to it. Among the given options, $800 is the correct choice representing the approximate discounted value.