If the Present Value of $100 Received One Year from Now

question 118

Multiple Choice

If the present value of $100 received one year from now is $80,what is the annual interest rate?

• A)8 percent
• B)10 percent
• C)20 percent
• D)25 percent
• E)50 percent

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Definitions:

Straight Voting

A voting system for electing directors where shareholders must vote for each board position individually, allowing majority shareholders to dominate elections.

Cumulative Voting

Cumulative Voting is a voting system that allows shareholders to allocate their votes in a flexible manner among one or more candidates during the election of a company's directors, enhancing minority shareholders' representation.

Growing Perpetuity

A constant stream of cash flows without end that is expected to rise indefinitely.