You Are Trying to Prepare a Budget Based Upon the Amount

question 55

Multiple Choice

You are trying to prepare a budget based upon the amount of cash flow that you will have available 5 years from now.You are initially promised a regular annuity of $50 with the first payment to be made 1 year from now and the last payment 5 years from now.However,you are actually going to receive an annuity due with the same number of payments but where the first payment is to begin immediately.How much (or less) cash will you have 5 years from now based upon that error if the rate to invest funds is 10%?

• A) $50.00
• B) $38.58
• C) $30.52
• D) ($30.52)

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Definitions:

Managerial Sense-Making

Refers to the process by which managers interpret and construct the meaning of events and data in the workplace, leading to informed decision-making.

Open Systems

Refers to systems that interact with their environment by exchanging information, material, or energy, demonstrating a level of dependence on external factors.

Resource Inputs

The resources (e.g., time, money, labor) that are required to produce goods or services in an organization.

Finished Goods

Products that have completed the manufacturing process and are ready to be sold to customers.