Which Investment Will Have the Highest Future Value at the End

question 34

Multiple Choice

Which investment will have the highest future value at the end of 10 years? Assume that the effective annual rate for all investments is the same.

• A)Investment A pays $250 at the beginning of every year for the next 10 years (a total of 10 payments).
• B)Investment B pays $125 at the end of every 6-month period for the next 10 years (a total of 20 payments).
• C)Investment C pays $125 at the beginning of every 6-month period for the next 10 years (a total of 20 payments).
• D)Investment D pays $2,500 at the end of 10 years (a total of one payment).

Identify the practices and implications of price discrimination through yield management.

Understand the principles and applications of various pricing strategies including cost-plus pricing, standard markup pricing, and target profit pricing.

Identify the differences between cost-oriented, demand-oriented, and profit-oriented pricing approaches.

Analyze the impact of the experience curve on pricing strategies in technology and manufacturing sectors.

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Definitions:

Z-score

A statistical measure that describes the position of a data point in terms of standard deviations from the mean.

Standard Normal Curve

A bell-shaped curve that represents the distribution of data in which the mean is 0 and the standard deviation is 1, used in statistics to represent theoretical distributions.

Z-score

An analytical indicator showing a value's position in relation to the average within a collection of values, expressed through its distance from the mean as measured in standard deviations.

Percentile

A value on a scale of one to a hundred that indicates the percent of a distribution that is equal to or below it.