You Are Due to Receive a Lump-Sum Payment of $1,650

question 22

Multiple Choice

You are due to receive a lump-sum payment of $1,650 in five years.Assuming a discount rate of 3.5 percent interest, what would be the value of the payment in Year 3?

• A)$1,488.21
• B)$1,540.29
• C)$1594.20
• D)$1,389.26
• E)$1,296.89

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Definitions:

Industry

A group of companies or organizations producing similar goods or services, often characterized by competition and innovation.

Positive Statement

An objective statement based on facts and evidence that can be tested and verified.

Value Judgment

An assessment based on personal views, ethical standards, or aesthetics, rather than on measurable or objective criteria.

Deduction

An amount that is subtracted from someone's gross income, reducing the taxable income and thus the amount of tax owed.