Present and Future Value Tables of $1 at 3% Are

question 114

Multiple Choice

Present and future value tables of $1 at 3% are presented below:

-Shelley wants to cash in her winning lottery ticket. She can either receive eight $100,000 semiannual payments starting today, or she can receive a single-amount payment today based on a 6% annual interest rate. What is the single-amount payment she can receive today?

• A) $853,020.
• B) $801,969.
• C) $744,090.
• D) $1,293,794.

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Definitions:

Salary

Salary refers to a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee.

Incremental Manufacturing Cost

The additional cost incurred to produce an extra unit of a product, reflecting only those costs that directly change with the level of production.

Production

Production involves the processes and methods used to transform raw materials or components into finished goods or services.

Units

A measurement of quantity for inventory, production, or financial calculation, indicating single items or entities.