How Much More Would You Be Willing to Pay Today

question 14

Multiple Choice

How much more would you be willing to pay today for an investment offering $10,000 in four years rather than the normally advertised five-year period? Your discount rate is 8 percent.

• A)$544.47
• B)$681.48
• C)$740.74
• D)$800.00 PV =

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Definitions:

Merchandise Return

The process of a customer returning previously purchased merchandise back to the seller, often for a refund or store credit.

Customer Refunds Payable

Liabilities on a company's balance sheet representing money owed to customers for returned goods or services that did not meet expectations.

Estimated Returns Inventory

An estimate of the goods or materials that are expected to be returned by customers over a certain period.

Discount Period

The time frame within which a payment is made early enough to receive a discount for early payment.