Which Scenario Has a Higher Present Discounted Value (Assume Interest

question 15

Multiple Choice

Which scenario has a higher present discounted value (assume interest is compounded annually) ; $100 received in 3 years if the interest rate is 8% or $90 received in 2 years if the interest rate is 7.25%?

• A) $100 owed in 3 years
• B) $90 owed in 2 years
• C) Both scenarios have the same present discounted value.
• D) It cannot be determined with information provided.

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Definitions:

Tying Agreements

Contracts where the sale of one good (the tying product) to a customer is conditional on the purchase of a second, distinct good (the tied product).

Branded Goods

Branded goods are products that are made by well-known manufacturers and carry a brand name or logo, distinguishing them from generic or no-name products.

Behavioralists

Researchers or theorists who study the effects of human behavior on decision-making processes, often in the context of economics or psychology.

Antitrust Applications

Legal processes and measures aimed at promoting competition and preventing anti-competitive practices among firms, such as monopolies or cartels.