If the Present Value of $1

question 12

Multiple Choice

If the present value of $1.00 received n years from today at an interest rate of r is 0.621,then what is the future value of $1.00 invested today at an interest rate of r% for n years?

• A)$1.000
• B)$1.610
• C)$1.621
• D)not enough information is given to solve the problem

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Definitions:

Differential Cost

Any cost that differs between alternatives in a decision-making situation. This term is synonymous with avoidable cost and relevant cost.

Decision-Making

The cognitive process of selecting a course of action from multiple alternatives.

Cost Alternatives

Different cost scenarios or options evaluated in decision-making processes.

Product Cost

The total cost associated with producing a product, including direct labor, direct materials, and manufacturing overhead.