The Present Value of an Ordinary Annuity of $350 Each

question 51

Multiple Choice

The present value of an ordinary annuity of $350 each year for five years, assuming an opportunity cost of 4 percent, is _________.

• A) $1,750
• B) $288
• C) $1,558
• D) $1,896

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Definitions:

Satisficing Solution

A decision-making strategy that aims for a solution that is good enough, rather than optimal, based on the available information and resources.

Herbert Simon

An economist, political scientist, and cognitive psychologist who made significant contributions to the fields of artificial intelligence, economics, and cognitive psychology, and who was awarded the Nobel Prize in Economics in 1978.

Comprehensive

Inclusive, covering completely or broadly, often describing an extensive or thorough approach or assessment.

Decision Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.