The Present Value of $1 Million to Be Received 10

question 74

Multiple Choice

The present value of $1 million to be received 10 years from now will

• A) decrease if the interest rate rises.
• B) be greater if the funds were going to be received 15 years from now.
• C) be greater than $1 million.
• D) increase if the interest rate were to rise from 4 percent to 8 percent.

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Definitions:

Account Titles & Descriptions

Names and explanations assigned to individual accounts in the financial statements, reflecting the nature and type of transaction.

Balance

A balance in financial terms refers to the amount of money or value remaining in an account, or the equality between the sum of debits and credits in an accounting record.

Accounts Receivable

Funds that customers owe a company for goods or services that have already been delivered or utilized, but payment has not yet been received.

Fees Earned

Income earned by a company for services provided to clients, usually recorded as revenue in the income statement.