Which of the Following Statements Is Not True

question 83

Multiple Choice

Which of the following statements is not true?

• A)Most people prefer to consume now than in the future.
• B)If you put $100 in a bank on 1/1/2010 and it earns compound interest at an annual rate of 10%,on 12/31/2011,you will have exactly $220.
• C)a dollar received today starts earning interest sooner than one received tomorrow.
• D)starting to save $2,000 a year at 10% at age 23 doubles the cash you would have if instead you started saving $2,000 a year at age 36.

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Definitions:

Required Rate

The minimum return an investor expects to achieve by investing in a project, often used as a benchmark to assess its viability.

Average Accounting Return

The average accounting return is a financial ratio that measures the profitability of an investment as the average net income the investment generates divided by the book value of the investment's initial cost.

Straight Line Method

A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.