What Is the Present Value (PV) of $80,000 Received Ten

question 22

Multiple Choice

What is the present value (PV) of $80,000 received ten years from now, assuming the interest rate is 5% per year?

• A) $38,422.76
• B) $76,000.00
• C) $40,000.00
• D) $49,113.06

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Definitions:

Harvesting Strategy

A business strategy focused on maximizing short-term profits with limited reinvestment, often used when winding down operations or in declining markets.

Product Deletion

The process of permanently removing a product from a company's offerings due to low sales, obsolescence, or changing company objectives.

Marketing Costs

refer to expenses associated with promoting and selling a product or service, including advertising, salesforce expenses, and promotional materials.

Fad Product

A product that becomes extremely popular in a short period of time and then quickly falls out of favor.