Jeff Has the Opportunity to Receive Lump-Sum Payments Either Now

question 33

Multiple Choice

Jeff has the opportunity to receive lump-sum payments either now or in the future.Which of the following opportunities is the best,given that the interest rate is 7% per year?

• A)one that pays $1,000 now
• B)one that pays $1,200 in two years
• C)one that pays $1,500 in five years
• D)one that pays $1,800 in ten years

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Definitions:

Freedom To Farm Act

A U.S. federal law enacted in 1996 aimed at allowing farmers greater management flexibility in what they plant and produce.

Agricultural Price Supports

Government interventions to stabilize or increase agricultural product prices through mechanisms such as subsidies or purchase commitments.

Acreage Allotments

A pre-1996 government program that limited the total number of acres to be used in producing (reduced amounts of) various food and fiber products and allocated these acres among individual farmers. These farmers had to limit their plantings to the allotted number of acres to obtain price supports for their crops.

Parity Ratio

is a measurement used to compare the value of one thing against another, often in agriculture or finance.