You Have Just Been Awarded a $200,000 Insurance Settlement

question 6

Multiple Choice

You have just been awarded a $200,000 insurance settlement. The insurance company has offered to invest this amount at a guaranteed interest rate of 4.5% for ten years. You think you can invest
This money yourself and earn an average return of 8%. If you are able to do that, how much more
Will your settlement be worth ten years from now than if you had left the funds with the insurance
Company?

• A) $78,829.69
• B) $86,991.91
• C) $118,009.42
• D) $121,191.12
• E) $137,188.23

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Definitions:

Perpetual System

An inventory management method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

FIFO Perpetual

An inventory management system where the first items purchased (First-In) are the first to be sold or used (First-Out), continuously updated.

Cost of Goods Sold

The total cost directly tied to the production of the goods sold by a company, including materials and labor.

Inventory on August 1

The quantity and value of goods available for sale or use by a business at the start of August, often used for financial or supply chain analysis.