What Is the Present Value of $5,000 to Be Received

question 211

Multiple Choice

What is the present value of $5,000 to be received 10 years from now if the interest rate is 10 percent?

• A) $1,927.72
• B) $500
• C) $4,545.45
• D) $12,968.71

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Definitions:

Mutual Interdependence

A situation in oligopoly markets where the actions of one firm significantly affect the outcomes of other competing firms.

Price Policy

The strategy or practices adopted by a company, organization, or government to set the selling price of products or services.

Perfectly Elastic Demand

Product or resource demand in which quantity demanded can be of any amount at a particular product or resource price; graphs as a horizontal demand curve.

Herfindahl Index

A measure of market concentration used to gauge the level of competition within an industry by calculating the sum of the squares of the market shares of each firm.