Assuming Interest Rates Were 6% Per Annum, What Would Be

question 71

Multiple Choice

Assuming interest rates were 6% per annum, what would be the present value of the $50,000 per year for 30 years payment stream? Use the tables or a financial calculator.

• A) $688,242
• B) $1,500,000
• C) $700,002
• D) $693,974

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent and salaries.

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.

Breakeven Volume

The quantity of products sold or services rendered at which total revenues equal total costs, resulting in no net loss or gain.

Sales Revenues

The income earned by a company from its sales of goods or the provision of services before any costs or expenses are deducted.