If the Annual Interest Rate Is 8%,an Asset That Promises

question 62

Multiple Choice

If the annual interest rate is 8%,an asset that promises to pay $160 after each of the next two years has a present value of

• A)$178.32.
• B)$285.32.
• C)$296.30.
• D)$300.00.
• E)$320.00.

---

Definitions:

Income Tax Reassessment

The process by which tax authorities review and possibly adjust the amount of income tax payable by an individual or corporation following the submission of tax returns.

Capital Asset

Long-term property or investment that is not easily sold or exchanged for cash without a substantial loss in value.

Consolidated Retained Earnings

The accumulated profits of a corporation and its subsidiaries after dividends have been paid out to shareholders.

Consolidated Statement

A financial statement that aggregates the financial position and operations of a parent company and its subsidiaries, presenting them as a single economic entity.