The Present Value of $500 Received at the End of Each

question 44

True/False

The present value of $500 received at the end of each of the next three years is $1,243 (assuming a 10% interest rate).

---

Definitions:

Machinery

Mechanical devices or equipment required in the manufacturing process or any industry-specific operations.

Operating Leverage

A measure of how revenue growth translates into growth in operating income due to fixed versus variable costs in business operations.

Capital-Intensive

A business process or industry that requires large amounts of money to produce goods or services, often due to high costs of machinery and equipment.