What Annual Payment Must You Receive in Order to Earn

question 130

Multiple Choice

What annual payment must you receive in order to earn a 6.5% rate of return on a perpetuity that has a cost of $1,250?

• A) $77.19
• B) $81.25
• C) $85.31
• D) $89.58
• E) $94.06

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Definitions:

Critical Thinking

The intellectually disciplined process of actively analyzing, synthesizing, and evaluating information gathered from observation, experience, reflection, or communication.

Prospective Employer

An individual or organization considering hiring a particular job seeker or candidate for employment.

Knowledge

Information, understanding, or skill obtained by experience or education; the theoretical or practical understanding of a subject.

Management Function

The activities and responsibilities carried out by managers, including planning, organizing, leading, and controlling, to achieve organizational goals.