Which of the Following Decisions Would Involve the Use of the Present

question 44

Multiple Choice

Which of the following decisions would involve the use of the present value of a $1 ordinary annuity table?

• A) Your brother buys your car and offers to pay you $500 now or $1,500 in two years.
• B) You win a lawsuit and are offered a lump-sum payment today of $100,000 or $15,000 a year for 20 years.
• C) Your father and mother wish to deposit enough money on the date of your high school graduation to enable you to take a cruise that will cost $7,000 when you graduate from college 4 years hence.
• D) You want to have $1,000,000 in order to retire at age 55, but need to know how much you will need to deposit each year from now until your 55th birthday.

---

Definitions:

Product Differentiation

The strategy of setting a product or service apart from those in the market to enhance its desirability to a certain target group.

Oligopolists

Firms that dominate an industry, characterized by a small number of entities controlling a large market share.

Price War

A competitive situation where rival companies repeatedly cut prices to undercut each other, often to gain market share.

Oligopoly

A market setup where a few companies dominate by holding a significant market share.