Uncle Roscoe, a Wealthy Relative, Has Given You a Choice

question 27

Multiple Choice

Uncle Roscoe, a wealthy relative, has given you a choice of receiving $10,000 today or $3,000 at the end of each year for the next four years. Which table factor(s) should be used to most efficiently determine the "value" of the $3,000 cash-flow stream?

• A) Future value of $1.
• B) Future value of a $1 annuity.
• C) Present value of $1.
• D) Present value of a $1 annuity.
• E) Both Present value of $1 and Present value of a $1 annuity.

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Definitions:

Hegel

A German philosopher of the late Enlightenment period, known for his dialectical method and his contributions to absolute idealism.

Adam Smith

An 18th-century Scottish economist and philosopher known as the father of classical economics, best known for his works "The Wealth of Nations," which outlines the basis for free market economics.

Invisible Hand

A term used by Adam Smith to describe the self-regulating nature of the marketplace, where individual self-interest can lead to beneficial social outcomes.

Buddhists

Followers of Buddhism, a spiritual tradition that focuses on personal spiritual development and the attainment of a deep insight into the true nature of life.