If the Single Amount of $12,500 Is to Be Received

question 171

Multiple Choice

If the single amount of $12,500 is to be received in 2 years and discounted at 11%, its present value is

• A) $11,363.75.
• B) $10,145.25.
• C) $11,261.25.
• D) $10,330.63.

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Definitions:

Variable Costs

Costs that change in proportion to the level of production or business activity, such as materials and labor costs.

Corporate Tax Rate

The tax imposed on the net income of a corporation, varying by country and sometimes by industry or revenue size.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Commercial Banks

Financial institutions that offer a wide range of banking services to businesses and consumers, including deposit accounts and loans.