A Court Settlement Awarded an Accident Victim Four Payments of $50,000

question 48

Multiple Choice

A court settlement awarded an accident victim four payments of $50,000 to be paid at the end of each of the next four years. Using a discount rate of 4%,calculate the present value of the annuity.

• A) $173,255
• B) $178,495
• C) $181,495
• D) $184,095
• E) $200,000

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Definitions:

After Tax Profit

The net income a company earns after all taxes have been deducted from total revenue.

Miscellaneous Liabilities

A balance sheet item for obligations that do not fit into the standard categories of liabilities, often including various minor or irregular commitments.

Proportionately Adjusted Balance Sheet

A balance sheet method that adjusts the assets, liabilities, and equity based on a company's percentage ownership in other entities.

Contractual Agreement

A contractual agreement is a legally binding contract between two or more parties, outlining the terms and conditions of an arrangement.