What Is the Present Value of a $500 Payment Made

question 119

Multiple Choice

What is the present value of a $500 payment made in four years when the discount rate is 8 percent?

• A) $365.35
• B) $367.51
• C) $460.00
• D) $680.24

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Definitions:

Inventory Liquidations

The process of converting a company's inventory into cash, typically at a discount, often used to meet short-term financial needs.

Income Taxes

Taxes imposed by government authorities based on the income earned by individuals and corporations.

Inventory Valuation Errors

Mistakes in calculating the end inventory that can significantly affect a company's cost of goods sold, profits, and tax liabilities.

Income Before Taxes

Income before taxes represents a company's earnings before any income tax expense has been deducted, reflecting the profitability of a company's operations.