If the Present Value of $480 to Be Paid at the End

question 59

Multiple Choice

If the present value of $480 to be paid at the end of one year is $400, what is the one-year discount factor?

• A) 0.8333
• B) 1.20
• C) 0.20
• D) None of the above

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Definitions:

Creditor Litigation

Legal proceedings initiated by a creditor to recover debts owed by a debtor, usually when other debt recovery methods have failed.

Security Interest

A legal claim or lien on assets or property, granted to secure the performance of an obligation or repayment of a debt.

Consumer Good

Goods produced and purchased for personal use, as opposed to those made for production or commercial use.

Perfected Interest

A legal status that gives a creditor priority over others in claiming collateral or property rights, typically involving a secured transaction that has been properly filed or recorded.