Which of the Following Has a Present Value of $100

question 407

Multiple Choice

Which of the following has a present value of $100?

• A)$110 in two years when the interest rate is 5 percent
• B)$112.36 in two years when the interest rate is 6 percent
• C)$117.49 in two years when the interest rate is 7 percent
• D)None of the above are correct to the nearest cent.

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Definitions:

Economic Profits

The surplus remaining after total costs (both explicit and implicit) are subtracted from total revenues, often indicating the financial health and efficiency of a company.

Long-Run Average Cost

The average cost per unit of output where all inputs, including capital, are variable over time, reflecting economies or diseconomies of scale.

Plant Size

The capacity or physical extent of a manufacturing facility, which influences its production capabilities, economies of scale, and operational efficiency.

ATC

ATC, or Average Total Cost, is the per-unit cost of production, calculated by dividing the total cost by the quantity of output produced, comprising both fixed and variable costs.