You Have Been Promised a Payment of $30,000 in the Future.In

question 126

Multiple Choice

You have been promised a payment of $30,000 in the future.In which case is the present value of this payment highest?

• A) You receive the payment 3 years from now and the interest rate is 8 percent.
• B) You receive the payment 3 years from now and the interest rate is 6 percent.
• C) You receive the payment 2 years from now and the interest rate is 8 percent.
• D) You receive the payment 2 years from now and the interest rate is 6 percent.

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Definitions:

Liquidity

A measure of how easily assets can be converted into cash without significant loss of value.

Supplier

A party that provides goods or services to another entity, typically in a B2B (business-to-business) relationship.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations, calculated by dividing current assets by current liabilities.

Asset Turnover Ratio

A financial metric that measures how efficiently a company uses its assets to generate sales revenue.