What's the Present Value of $4,500 Discounted Back 5 Years

question 44

Multiple Choice

What's the present value of $4,500 discounted back 5 years if the appropriate interest rate is 4.5%, compounded semiannually?

• A) $3,089
• B) $3,251
• C) $3,422
• D) $3,602
• E) $3,782

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Definitions:

Costing Approach

A method or strategy used to evaluate the expenses involved in producing a product or service, impacting pricing and budgeting decisions.

Direct Costs

Expenses that can be directly attributed to the production of specific goods or services, such as materials and labor.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Utility

The total satisfaction or value derived from consuming goods or services, often considered in economic decisions and analyses.