Suppose That the Present Value of Receiving a Guaranteed $450

question 28

Multiple Choice

Suppose that the present value of receiving a guaranteed $450 in two years is $385.80.The opportunity rate of return on similar risk investments is 8 percent.According to this information, all else equal, which of the following statements is correct?

• A)It always would be preferable to wait two years to receive the $450 because this value is greater than the present value.
• B)Risk averse investors always would prefer to take the $385.80 today because it is a guaranteed amount whereas there is uncertainty as to whether the future amount will be paid.
• C)No investor should be willing to pay more than $385.80 for such an investment.
• D)It is apparent the present value was computed incorrectly because the present value of a future amount always should be greater than the future value.
• E)None of the above is a correct answer.

Comprehend the evolution of labor rights and conditions from the early years of US history.

Analyze the role of labor unions in addressing workers' rights and social justice.

Understand the concept of union jurisdiction and its significance in labor organization.

Grasp the challenges and responses of labor unions to globalization and internationalization.

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Definitions:

Acquisition Cost

The total cost incurred to acquire an asset, including the purchase price and any associated costs such as installation and transportation.

Goodwill

Goodwill is an intangible asset that arises when a company acquires another for a price higher than the fair value of its net identifiable assets, representing factors like brand reputation or customer relationships.

Identifiable Net Assets

The portion of a company's net assets that can be attributed to specific assets and liabilities, excluding goodwill.

Amortization Period

The length of time over which a company gradually writes off the initial cost of an intangible asset.