How Much Would $5,000 Due in 25 Years Be Worth

question 138

Multiple Choice

How much would $5,000 due in 25 years be worth today if the discount rate were 5.5%?

• A)$1,067.95
• B)$1,124.16
• C)$1,183.33
• D)$1,245.61
• E)$1,311.17

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Definitions:

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell products, and receive cash from sales, representing the full cycle of a business's operations.

Short-Term Investments

Investments typically expected to be converted into cash within one year, such as stocks or bonds.

GAAP

GAAP stands for Generally Accepted Accounting Principles, which are a collection of commonly-followed accounting rules and standards used in the United States for financial reporting.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that guide the preparation of financial statements globally.