Your Local Travel Agent Is Advertising an Extravagant Global Vacation

question 77

Multiple Choice

Your local travel agent is advertising an extravagant global vacation.The package deal requires that you pay $5,000 today,$15,000 one year from today,and a final payment of $25,000 on the day you leave two years from today.What is the cost of this vacation in today's dollars if the discount rate is 6 percent?

• A)$39,057.41
• B)$41,400.85
• C)$43,082.39
• D)$44,414.14
• E)$46,518.00

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Definitions:

Marginal Cost

The upsurge in total expenditure associated with the fabrication of one further unit of a good or service.

Cartel

A formal agreement among competing firms to control prices, limit output, or divide markets to gain an advantageous market position.

Industry Output

The total production or service provision by companies within a specific industry.

Industry Profit

The total earnings generated by companies within a specific industry after covering all operating costs.