MsDunlap Has Just Won the Big Bingo Prize

question 101

Multiple Choice

Ms.Dunlap has just won the big bingo prize.She has two options for receiving her prize.She can either take a $1,050 now or two installments of $550, one now and one next year.At what interest rate would the two payments be equivalent?

• A)4.75 percent.
• B)8.25 percent.
• C)10 percent.
• D)15 percent.

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Definitions:

Inventory Purchases

The total cost incurred to buy goods intended for sale during a specific accounting period before any deductions or sales.

Actuarial Estimates

Actuarial estimates are calculations done by actuaries to predict future liabilities, expenses, and life expectancies, often for use in insurance and pension plans.

Other Comprehensive Income

Components of comprehensive income that are excluded from net income, including items such as unrealized gains or losses on foreign investments, pension plan adjustments.

IFRS

A collection of global accounting standards, International Financial Reporting Standards dictate the reporting methods for specific transactions and events in financial statements.