Shelley Won a Lottery and Will Receive $1,000 a Year

question 26

Multiple Choice

Shelley won a lottery and will receive $1,000 a year for the next ten years.The value of her winnings today discounted at her discount rate is called which one of the following?

• A)single amount
• B)future value
• C)present value
• D)simple amount
• E)compounded value

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Definitions:

Initial Value Method

An accounting method that records an investment at its original cost without adjusting for changes in market value or the investee's earnings, except to recognize impairments.

Intra-entity Transfers

Transactions occurring between divisions or units within the same company.

Income Taxes

Taxes levied by governments on the income generated by individuals and businesses within their jurisdiction.

Gross Profit

The difference between revenue and the cost of goods sold, indicating how efficiently a company produces goods/services at a profit.