If the Present Value of $1 Received N Years from Today

question 51

Multiple Choice

If the present value of $1 received n years from today at an interest rate of r is 0.621, then what is the future value of $1 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:

Equity Financing

The process by which a company raises capital through the sale of shares.

Depreciation

A method of allocating the cost of a tangible asset over its useful life.

Noncash Expense

Expenses recorded on an income statement that do not involve a direct cash outflow, such as depreciation or amortization.

Traditional Income Statement

A financial statement that displays a company's revenues, expenses, and net income over a specific period, typically emphasizing historical cost accounting.