To Compute the Present Value of $1,000 Discounted at the Rate

question 4

Multiple Choice

To compute the present value of $1,000 discounted at the rate of 5% per year, to be received at the end of 3 years, you should enter the following variables into a financial calculator

• A) N=3, i=5, PV=1000
• B) N=3, i=5, FV=1000
• C) N=3, i=5, PMT=1000
• D) N=3, i=.05, PV=1000

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Definitions:

CCA Depreciation

Stands for Capital Cost Allowance Depreciation, which is a way to claim a tax deduction for the depreciating value of assets over time in Canada.

Market Value

The market's present selling or buying price for an asset or service.

CCA Class

Refers to the classification of tangible property under the Canadian Capital Cost Allowance for purposes of tax depreciation.

Tax Rate

The cut of income taxed from individuals and corporations.