What is the present value (PV) of the following set of cash flows, discounted at an annual rate of 8\%? \[\begin{align*}\text{Year 1:} & \quad \$1,000 \\\text{Year 2:} & \quad \$1,500 \\\text{Year 3:} & \quad \$2,000 \end{align*}\]Choose the closest answer.

Step 1: Understand the concept of Present Value (PV). PV is the current worth of a future sum of money or stream of cash flows given a specified rate of return (discount rate). The formula for PV of a single cash flow is: \( PV = \frac{FV}{(1 + r)^n} \), where \( FV \) is the future value, \( r \) is the discount rate, and \( n \) is the number of periods.