If $10,000 Is Invested in a Certain Business at the Start

question 31

Multiple Choice

If $10,000 is invested in a certain business at the start of the year, the investor will receive $3000 at the end of each of the next four years. What is the net present value of this business opportunity if the interest rate is 7% per year?

• A) $148.53
• B) $178.88
• C) $161.63
• D) $172.45

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Definitions:

Odd Number

An integer not divisible by two, differing from even numbers, and having a remainder of one when divided by two.

Odds

A measure of the likelihood of a specific outcome in an event, often used in gambling and statistics.

Probability

The extent to which an event is likely to occur, measured by the ratio of the favorable cases to the whole number of cases possible.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1.