Identify the Correct Statement About Present Value in the Calculation

question 31

Multiple Choice

Identify the correct statement about present value in the calculation of the economic value of life.

• A)Because the timing of the death cannot be predicted, it is common to calculate the annuity value of the income stream to derive at a single number that is used for the calculation of present value.
• B)The use of the present value concept is impractical because it gives us several figures for the estimated of the economic value of the person.
• C)The importance of the present value technique lies in its use as a tool for planning the needed financial protection against the case of a premature death.
• D)Discounting in the present value method makes the distant future cash flows more significant.
• E)The present value of a future stream of earnings is independent of interest rates and time.

---

Definitions:

U.S. Constitution

The foundational document of the United States of America outlining the framework of the government and the rights of the citizens.

Bankruptcy Court

A federal court of limited jurisdiction that hears only bankruptcy proceedings.

Bankruptcy Law

Bankruptcy Law refers to regulations that govern the process by which individuals or entities unable to pay their debts can seek relief through a legal declaration of bankruptcy.

Proceedings

A series of actions or steps taken in order to achieve a particular legal outcome or to conduct official business.