Suzette Is Going to Receive $10,000 Today as the Result

question 114

Multiple Choice

Suzette is going to receive $10,000 today as the result of an insurance settlement. In addition,she will receive $15,000 one year from today and $25,000 two years from today. She plans on saving all of this money and investing it for her retirement. If Suzette can earn an average of 11% on her investments,how much will she have in her account if she retires 25 years from today?

• A) $536,124.93
• B) $541,414.14
• C) $546,072.91
• D) $570,008.77
• E) $595,098.67

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Definitions:

Depreciation

The accounting process of allocating the cost of tangible assets over their useful lives, reflecting wear and tear or obsolescence.

Inventory

A company's merchandise, raw materials, and finished and unfinished products which have not yet been sold.

Matching Principle

An accounting concept that dictates that expenses should be recorded in the same period as the revenues they help to generate.

Expected Economic Life

The anticipated period over which an asset is useful to the owning entity in generating revenue.