(Ignore Income Taxes in This Problem

question 6

Multiple Choice

(Ignore income taxes in this problem.) In order to receive $12,000 at the end of three years and $10,000 at the end of five years,how much must be invested now if you can earn 14% rate of return?

• A) $12,978
• B) $8,100
• C) $13,290
• D) $32,054

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Definitions:

Legal Barriers

Restrictions imposed by law that limit the entry of new firms into an industry or protect existing firms from competition.

Predatory Pricing

A pricing strategy where a company sets prices below cost to eliminate competition and establish a monopoly over time.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, resulting in a reduced cost per unit.

Legal Barriers

Restrictions or regulations established by law that limit entry or operation in certain markets or industries.