In Which of the Following Instances Is the Present Value

question 2

Multiple Choice

In which of the following instances is the present value of the future payment the largest?

• A)You will receive $1,000 in 5 years and the annual interest rate is 5 percent.
• B)You will receive $1,000 in 10 years and the annual interest rate is 3 percent.
• C)You will receive $2,000 in 10 years and the annual interest rate is 10 percent.
• D)You will receive $2,400 in 15 years and the annual interest rate is 8 percent.

Acknowledge the accounting treatment and implications of asset revaluation upon the admission of a new partner.

Learn the financial consequences of ownership interest transactions among partners and third parties.

Understand how the admission of a new partner by contributing assets or buying an interest affects the partnership's owners' equity.

Understand the process and implications of admitting a new partner into a partnership.

---

Definitions:

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing a measure of consumer benefit.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, typically viewed as a measure of producer welfare.

Consumer Surplus

The divergence between the sum consumers are prepared to pay for a product or service and the sum that is actually paid.