In Calculating the Present Value of $1,000 to Be Received

question 14

Multiple Choice

In calculating the present value of $1,000 to be received 5 years from today, the discount factor has been calculated to be .7008. What is the apparent interest rate?

• A) 5.43%
• B) 7.37%
• C) 8.00%
• D)9.50%

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Definitions:

Franchisors

Companies or individuals that grant licenses to third parties to conduct business under their trademark and business model.

International Franchise

A business model where a company allows an individual or other business to operate a franchise in a foreign country using its brand, trademark, and products.

Fast Food Chain

A series of restaurants serving quick-service food items, standardized across locations for consistency and speed.

Contractual Business Arrangement

A legally binding agreement between two or more parties outlining the terms and conditions of a business relationship.