If the Discount Rate Is 12%, What Is the Present

question 13

Multiple Choice

If the discount rate is 12%, what is the present value of the following cash flows:
$$\begin{array} { l c } \text { Year } & \text { Cash Flow } \\1 & \$ 10,000 \\2 & \$ 11,000 \\3 & \$ 12,000 \\4 & \$ 13,000 \\5 & \$ 14,000 \\6 - 15 & \$ 15,000 \text { each year }\end{array}$$

• A)$144,618
• B)$127,923
• C)$127,197
• D)$ 90, 537

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Definitions:

Brand Loyalty

The tendency of consumers to continuously purchase products from the same brand due to satisfaction, preference, or perceived superiority.

Elastic

A description of a situation where the demand or supply for a good or service significantly changes in response to a change in price.

Inelastic

Describes a situation where the demand or supply for a product does not change significantly when the price of the product changes.

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage.