The Present Value of $7,500 to Be Received Each Year

question 28

Multiple Choice

The present value of $7,500 to be received each year for five years and earning an 10 percent return (rounded) is

• A)$28,433.
• B)$8,250.
• C)$14,717.
• D)$33,750.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or output.

Fixed Costs

Expenses that do not change with the level of goods or services produced over a short period.

Space Rental

The act of obtaining the use of a physical location or property for a specified period of time in exchange for payment.

Raw Material Cost

The expenditure incurred for the raw ingredients or basic materials that are converted through manufacturing processes into goods or services.