In Present Value Calculations, the Process of Determining the Present

question 58

Multiple Choice

In present value calculations, the process of determining the present value of a single sum of money is called:

• A) pricing
• B) discounting
• C) allocating
• D) negotiating

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Definitions:

Consumer Surplus

The distinction between the total sum consumers are ready and financially equipped to pay for a product or service, and the sum they actually end up paying.

Consumer Surplus

The variegation between the preferred payment amount by consumers for a good or service and their final payment amount.

Producer Surplus

The discrepancy between the price at which producers are prepared to sell a product and the actual price they obtain.

Consumer Surplus

A mismatch between the price consumers feel prepared to pay for a good or service, and the actual outlay.