Below Is a Table for the Present Value of $1

question 142

Multiple Choice

Below is a table for the present value of $1 at compound interest.
Below is a table for the present value of an annuity of $1 at compound interest.

Using the tables above, if an investment is made now for $20,000 that will generate a cash inflow of $7,000 a year for the next 4 years, what would be the present value of the investment cash inflows, assuming an earnings rate of 12%?

• A) $20,352
• B) $3,969
• C) $22,190
• D) $21,259

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Definitions:

Variation in Hue

Differences in color perception, which can be attributed to changes in wavelength, saturation, and lightness.

Door-in-the-face Technique

A persuasion strategy where a large, unreasonable request is first made knowing it will be refused, followed by a smaller, more manageable request.

Large Request

A technique in persuasion and social influence wherein an initially substantial and possibly unrealistic demand is made, expecting a subsequent smaller request to be more likely accepted.

Small Request

A strategy in persuasion where one starts with a minor request to increase the likelihood of compliance with a larger request later.