If the Interest Rate Is 10% and Cash Flows Are

question 68

Multiple Choice

If the interest rate is 10% and cash flows are $1,000 at the end of year one and $2,000 at the end of year two, then the present value of these cash flows is

• A)$2,562.
• B)$3,200.
• C)$439.
• D)$3,000.

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Definitions:

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor, such as labor or capital, holding all other factors constant.

Product Market

The marketplace where final goods or services are offered to consumers, businesses, and the public sector.

Tax Imposed

The act of levying or enforcing a financial charge or other levy upon a taxpayer by a governmental organization.

Supply of Labor

The sum of hours employees are prepared and available to work at a specified rate of pay, within a certain timeframe.