If Nicolai Earns an 8 Percent After-Tax Rate of Return

question 121

Multiple Choice

If Nicolai earns an 8 percent after-tax rate of return, $20,000 today would be worth how much to Nicolai in five years? Use future value of $1. (Round discount factor(s) to four decimal places.)

• A)$20,000
• B)$13,620
• C)$18,520
• D)$21,600
• E)None of the choices are correct.

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Definitions:

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The amount of money a company uses for its advertising efforts to promote its products or services.

Contribution Margin

Contribution Margin is the difference between sales revenue and variable costs of production, indicating how much revenue contributes to fixed costs and profit.

Contribution Format

A financial reporting format that highlights the contribution margin, used primarily in internal decision-making processes.

Income Statement

A financial report detailing a firm's income and expenditures within a certain timeframe, resulting in the total earnings or deficit experienced during that interval.