If a 14% Rate of Return Can Be Achieved, How

question 89

Multiple Choice

If a 14% rate of return can be achieved, how much will need to be invested today in order to receive $12,000 at the end of 3 years plus $10,000 at the end of 5 years? Round to the nearest whole number.

• A)$33,053
• B)$5,194
• C)$11,426
• D)$13,294

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Definitions:

Variable Costs

Costs that change in proportion to the level of production or business activity.

Profit

The financial gain made in a transaction or operation, calculated as the difference between revenue and expenses.

Fixed Costs

Expenses that do not change in relation to levels of production or sales, remaining constant even as output varies.

Unit Variable Cost

The cost associated with producing an additional unit of a product, not including fixed costs that remain constant regardless of production volume.