What Is the Present Value of $500 to Be Received

question 265

Multiple Choice

What is the present value of $500 to be received eight years from now if the interest rate is 5 percent?

• A) $300
• B) $338.42
• C) $700
• D) $738.72

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Definitions:

Collusively

Involves cooperation among competing firms to control market prices or exclude new competitors, contrary to free market principles.

Economic Profits

The surplus remaining after subtracting total costs from total revenues, including both explicit and implicit costs.

Positive Economic Profits

Positive economic profits occur when a firm's total revenues exceed its total costs, inclusive of both explicit and implicit costs.

Monopolist

An entity that is the sole provider of a particular product or service in the market, possessing the power to significantly influence prices and supply.