Roy Is Going to Receive a Payment of $5,000 One

question 98

Multiple Choice

Roy is going to receive a payment of $5,000 one year from today. He earns an average of 6% on his investments. What is the present value of this payment?

• A) $4,717
• B) $4,821
• C) $5,000
• D) $5,300

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Definitions:

ROI

An evaluation tool applied to determine the profitability or efficiency of a single investment or to analyze and compare the efficacy of multiple investments.

Margin

The difference between the selling price of a product and its cost, often expressed as a percentage of the selling price.

Division

A distinct part of a larger company or organization that operates semi-independently, focusing on a specific set of products, services, or market segment.

Investment Opportunity

A potential venture or asset that presents the possibility for financial growth or returns.