The Solution to This Problem Requires Time Value of Money

question 140

Multiple Choice

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. A company will have to pay a $50,000 liability in 4 years.How much must be deposited now into a bank account earning 8% compounded semiannually to fully fund the future payment?

• A) $34,000
• B) $35,500
• C) $36,523
• D) $36,550

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Definitions:

Epididymis

A tightly coiled tube situated at the back of the testicle where sperm are stored and mature.

Scrotum

The pouch of skin that contains and protects the testicles, as well as regulates their temperature.

Penis

The male external genitalia that serves as both the organ of sexual intercourse and the passageway for urine to leave the body.

Testis

The male reproductive gland that produces sperm and testosterone, located in the scrotum.