Which of the Following Has the Highest Present Value

question 8

Multiple Choice

Which of the following has the highest present value?

• A) $1000 received in 3 years if the current interest rate is 4%
• B) $1500 received in 5 years if the current interest rate is 6%
• C) $2000 received in 6 years if the current interest rate is 11%
• D) $3000 received in 10 years if the current interest rate is 12%

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Definitions:

Distributive Negotiation

A negotiation strategy in which parties view the resources as fixed and aim to maximize their own share.

Soft Distributive Negotiation

A negotiation style focusing on collaboration and win-win outcomes, emphasizing relationship preservation over maximizing individual gain.

Myth of the Fixed Pie

A misconception in negotiation that assumes the parties involved have directly opposing goals, making it impossible for both sides to achieve their objectives simultaneously, promoting a win-lose mindset.

Hard Distributive Negotiation

A negotiation approach where one party's gain is the other's loss, focusing on winning as much value as possible.