What Is the Present Value of a $1,100 Payment Made

question 50

Multiple Choice

What is the present value of a $1,100 payment made every year forever when interest rates are 4.5%?

• A) $11,100
• B) $21,089.37
• C) $22,963.14
• D) $24,444.44

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Definitions:

Business Decision Makers

Individuals or groups within an organization responsible for analyzing situations and making choices that affect the organization's direction and success.

Resources

Assets, materials, and inputs needed for the production of goods and services, including human resources, natural resources, and capital resources.

Price-Taker Firm

A price-taker firm is a business that accepts the market price set by the forces of supply and demand, lacking sufficient power to influence the price on its own.

Maximize Profit

The process of increasing the difference between the cost of production and the revenue generated from sales to the highest possible level.