Jarrod Says That the Future Value of $250 Saved for One

question 40

Multiple Choice

Jarrod says that the future value of $250 saved for one year at 6 percent interest is less than the future value of $250 saved for two years at 3 percent interest.Simon says that the present value of a $250 payment to be received in one year when the interest rate is 6 percent is less than the value of a $250 payment to be received in two years when the interest rate is 3 percent.

• A)Jarrod and Simon are both correct.
• B)Jarrod and Simon are both incorrect.
• C)Only Jarrod is correct.
• D)Only Simon is correct.

Understand the impact of departmentalization on organizational structure.

Acknowledge the importance of adaptability and flexibility for future organizational effectiveness.

Identify the implications of decentralization and centralization on organizational control.

Understand the principles of responsibility and authority in management.

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Definitions:

Income

Income earned, particularly when it's consistent, from work or investment returns.

Efficient Allocation

An economic condition where resources are distributed in a way that maximizes the welfare of society, ensuring that every good or service is produced up to the point where the last unit provides a benefit equal to the cost of producing it.

Risk

Uncertainty about future outcomes.

Risk-Averse

A description of an individual or organization that prefers to avoid uncertainty and is willing to sacrifice some potential gain to avoid risk.