The Present Value of a Lump-Sum Future Amount

question 54

Multiple Choice

The present value of a lump-sum future amount:

• A)increases as the interest rate decreases.
• B)decreases as the time period decreases.
• C)is inversely related to the future value.
• D)is directly related to the interest rate.
• E)is directly related to the time period.

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Definitions:

SUTA Tax Payable

The liability owed by employers to the state for the State Unemployment Tax Act, used to fund unemployment benefits.

Payroll Tax Expense

Payroll Tax Expense is the employer's cost associated with the employment of staff, including taxes such as social security and Medicare taxes that must be paid based on salaries.

Wages Payable

A liability account representing the amount owed to employees for work performed but not yet paid.

Gross Earnings

The total income earned by an individual or business before any deductions like taxes and social security contributions.