In Order to Compute the Present Value of an Annuity

question 26

Multiple Choice

In order to compute the present value of an annuity it is necessary to know the
1) discount rate.
2) number of discount periods and the amount of the periodic payments or receipts.

• A) 1
• B) 2
• C) both 1 and 2
• D) something in addition to 1 and 2

---

Definitions:

Soybeans

A species of legume known for its edible bean, which has numerous uses including oil, meal, and livestock feed.

Total Revenue

The income that a company receives from selling its goods or services before any costs or expenses are subtracted.

Inverse Demand Function

Represents the relationship between the price of a good and the quantity demanded, showing the maximum price consumers are willing to pay for a specific quantity.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, often defined as the percentage change in quantity demanded divided by the percentage change in price.