What's the Present Value of a 4-Year Ordinary Annuity of $2,250

question 106

Multiple Choice

What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $3,000 at the end of Year 4 if the interest rate is 5%?

• A) $8,509
• B) $8,957
• C) $9,428
• D) $9,924
• E) $10,446

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Definitions:

Finished Goods

Products that have completed the manufacturing process but have not yet been sold or distributed to customers.

Raw Material Costs

The expenses associated with the acquisition of raw materials used in the production of goods.

Labor Costs

The total sum of all wages paid to employees, as well as the cost of employee benefits and payroll taxes incurred by an employer.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including but not limited to utilities, maintenance, and salaries of supervisory personnel.