Which of the Following Best Expresses the Present Value of $500

question 10

Multiple Choice

Which of the following best expresses the present value of $500 that you have to wait four years and three months to receive?

• A)($500/4.25) × (1 + i)
• B)$500 × 4.25 × (1 + i)
• C)$500/(1 + i)4.25
• D)($500/4) × (1 + i)3

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Liquid Assets

Assets that can be quickly and easily converted into cash without significant loss in value.

Liabilities

Financial obligations or debts that an individual or organization owes to others.

Debt Ratio

A financial metric that measures the proportion of a company's total debt to its total assets, indicating the degree of leverage and financial risk.