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

question 44

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 percent
• B)7.37 percent
• C)8.00 percent
• D)9.50 percent discount factor =

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Definitions:

Polluting Good

A product or service that when produced or used, negatively impacts the environment by releasing harmful substances.

Optimal Amount

The most favorable level of a certain variable, considering conditions that maximize efficiency or outcomes.

External Benefits

Advantages or positive effects that a transaction or activity provides to people not directly involved in it.

Market Price

The current price at which an asset or service can be bought or sold in a specific market.