If the Discount Rate Is 5 Percent, the Present Value

question 24

Multiple Choice

If the discount rate is 5 percent, the present value of annual $100, 000 payments in perpetuity (i.e., continued indefinitely into the future) is

• A)$2, 000, 000
• B)$1, 246, 296
• C)$1, 000, 000
• D)$976, 463
• E)infinite

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Definitions:

Workingmen's Parties

Early political groups in the United States, active in the 1820s and 1830s, that advocated for the rights and interests of working-class men, including calls for shorter workdays and the abolition of debtor prisons.

Machinery

Tools, equipment, and devices that use mechanical power and are designed to perform specific tasks, significantly enhancing productivity and efficiency in various industries.

Federal Minimum Wage

The lowest legal wage that employers can pay their employees, as established by federal law in the United States.

Congress

The legislative assembly in the United States, incorporating the Senate and the House of Representatives as its two divisions.