Which of the Following Decisions Would Involve the Use of the Present

question 64

Multiple Choice

Which of the following decisions would involve the use of the present value of $1?

• A)Your brother buys your car and offers to pay you $500 now or $1,500 in two years
• B)You win a lawsuit and are offered a lump sum payment today of $100,000 or $15,000 a year for 20 years
• C)Your father and mother wish to deposit enough money on the date of your high school graduation to enable you to take a $7,000 cruise when you graduate from college in 4 years
• D)You want to have $1,000,000 in order to retire at age 55,but need to know how much you will need to deposit each year from now until your 55th birthday

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Definitions:

Psychiatrists

Medical doctors specializing in the diagnosis, treatment, and prevention of mental, emotional, and behavioral disorders.

Psychologists

Professionals specializing in the study of the mind and behavior, working in fields such as clinical, counseling, and cognitive psychology.

Whites

Typically refers to individuals of European descent; however, the definition can vary by context and geographical location.

Alcoholics

People who suffer from alcoholism, a chronic disease characterized by uncontrolled drinking and obsession with alcohol.