Suppose the Current Price of Gold Is $600 Per Ounce

question 30

Multiple Choice

Suppose the current price of gold is $600 per ounce and the price of gold is expected to increase at a rate of 5 percent per year for the foreseeable future. What is the current value of 0.2 million ounces of gold to be produced each year for the next five years (the discount rate is 8 percent per year) ?

• A)$600.00 million
• B)$521.64 million
• C)$690.86 million
• D)$3,000.00 million

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Definitions:

Placebo

is a substance or treatment with no therapeutic effect given to a participant in a study as a control to test the efficacy of another treatment, or used to elicit a psychological benefit through the belief in the treatment.

Metronome

A device used by musicians that marks time at a selected rate by giving a regular tick sound.

Meat Powder

A substance made from dried and pulverized meat, used as nutritional supplement or in cooking.

Contingency View

A management approach suggesting that organizational effectiveness stems from fitting design and operational practices to contextual factors.