What Is the Discount Factor for $1 to Be Received

question 109

Multiple Choice

What is the discount factor for $1 to be received in 5 years at a discount rate of 8%?

• A) .4693
• B) .5500
• C) .6000
• D).6806

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Definitions:

Senior Citizens

Individuals who are considered elderly, typically qualifying for certain benefits at a particular age, often 65 or older.

Profit-Maximizing

A strategy or behavior aimed at making the highest possible profit, where marginal costs equal marginal revenues.

Identical Demand

Refers to a market situation where all consumers have the same desire or need for a particular product or service.

Demand Elasticities

Demand elasticities measure how sensitive the quantity demanded of a good or service is to changes in its price, income levels, or other factors.