Which of the Following Transactions Would Best Use the Present

question 32

Multiple Choice

Which of the following transactions would best use the present value of an annuity due of 1 table?

• A)Diamond Bar, Inc.rents a truck for 5 years with annual rental payments of $20,000 to be made at the beginning of each year.
• B)Michener Co.rents a warehouse for 7 years with annual rental payments of $120,000 to be made at the end of each year.
• C)Durant, Inc.borrows $20,000 and has agreed to pay back the principal plus interest in three years.
• D)Babbitt, Inc.wants to deposit a lump sum to accumulate $50,000 for the construction of a new parking lot in 4 years.

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Definitions:

Internalize

The process of incorporating the values, attitudes, and norms of a society into one's own belief system.

Conformity

The act of matching attitudes, beliefs, and behaviors to what is considered normal or acceptable in society.

Financial Success

The achievement of financial goals and stability, often measured by wealth, income, and ability to meet personal and family needs.

Cultural Goals

The objectives, ambitions, or desired outcomes that are widely accepted and pursued within a culture.