Susie Wants to Know How Much She Needs to Save

question 59

Multiple Choice

Susie wants to know how much she needs to save today to have $5,000 in five years. Which of the following tables should she use?

• A) Present value of $1
• B) Present value of an ordinary annuity
• C) Future value of $1
• D) Future value of an ordinary annuity

---

Definitions:

Working Capital

The difference between a company's current assets and current liabilities, used to measure its short-term financial health and operational efficiency.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle if longer.

Current Liabilities

Financial obligations of a business that are due and payable within one year, including accounts payable, short-term loans, and other short-term debts.

Common-size Percent

A financial analysis tool that converts income statement items into percentage of revenue, facilitating trend analysis and comparison.