If the Present Value of an Ordinary, 10-Year Annuity Is

question 93

Multiple Choice

If the present value of an ordinary, 10-year annuity is $25,000 and interest rates are 7 percent, what is the present value of the same annuity due?

• A) $23,644.49
• B) $24,997.51
• C) $25,000.00
• D) $26,750.00

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Definitions:

LIFO Method

An inventory valuation method that assumes the last items added to inventory are the first ones to be sold (Last In, First Out).

Periodic Inventory System

An inventory valuation method where the ending inventory and cost of goods sold are determined at the end of the accounting period.

Subsidiary Ledger

A detailed ledger that contains the individual accounts related to a specific category, supplementing the general ledger.

Consignment

An arrangement where goods are left with a third party to sell, but ownership remains with the supplier until the goods are sold.