You Have Been Promised a Payment of $400 in the Future.In

question 202

Multiple Choice

You have been promised a payment of $400 in the future.In which of the following cases is the present value of this payment the lowest?

• A)You receive the payment 4 years from now and the interest rate is 4 percent.
• B)You receive the payment 4 years from now and the interest rate is 5 percent.
• C)You receive the payment 5 years from now and the interest rate is 4 percent.
• D)You receive the payment 5 years from now and the interest rate is 5 percent.

---

Definitions:

Incorporator

The individual or entity responsible for creating and filing the necessary documentation to legally form a corporation with the state.

De Facto Corporation

A business entity that operates as if it were a corporation although it has not completed the legal formalities for incorporation, and may be treated as a corporation by courts.

De Jure Corporation

A corporation that has fully complied with all legal requirements for its establishment, and thus has legal recognition.

Corporation by Estoppel

A legal doctrine that prevents a party from denying the corporation's existence if they have dealt with it as if it were a legal corporation.