The Present Value of $X, to Be Received N Periods

question 133

Multiple Choice

The present value of $X, to be received n periods in the future, is equal to

• A) X × (1 + i)ⁿ.
• B) X × (1 + i)/n.
• C) X/(1 + i)ⁿ.
• D) X/(1 + i) × n.

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Definitions:

Company Tax Rate

The rate at which a company is taxed on its profits by the government.

Inventories

The total amount of goods available for sale and raw materials available to produce those goods held by a company.

Subsidiary Entity

A company that is controlled by another company, often referred to as the parent company, through ownership of more than half of the subsidiary's voting stock.

Parent Entity

A business that controls one or more subsidiary companies.