If You Will Receive $5, 000 Two Years from Today

question 109

Multiple Choice

If you will receive $5, 000 two years from today, what is its present value if the discount rate is 5 percent?

• A)$5, 025
• B)$4, 500
• C)$3, 429
• D)$4, 535
• E)$4, 762

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Definitions:

Normal Standards

The expected performance or cost levels under normal operating conditions, used for budgeting or measuring efficiency.

Ideal Standards

Benchmark or optimal performance levels set in managerial accounting to evaluate operational efficiency, without considering any business constraints.

Theoretical Standards

Idealized cost and efficiency targets in manufacturing or production, based on perfect operating conditions.

Standard Cost Variances

The differences between the expected (standard) costs and the actual costs incurred.