Drew Receives an Inheritance That Pays Him $50,000 Every Three

question 41

Multiple Choice

Drew receives an inheritance that pays him $50,000 every three months for the next two years.Which of the following is closest to the present value (PV) of this inheritance if the interest rate is 8.5% (EAR) ?

• A)$354,223
• B)$364,309
• C)$365,322
• D)$400,000
• E)$339,782

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Definitions:

Customers Served

The number of clients or customers to whom a business has provided goods or services within a specified period.

Activity Variance

The difference between the planned activity level and the actual activity level.

Planning Budget

A financial forecast or projection, detailing expected revenues and expenses within a future period.

Net Operating Income

The profit a company generates from its regular business operations, excluding expenses and revenues from non-operating activities.