What Is the Present Value (PV)of $50,000 Received 20 Years

question 55

Multiple Choice

What is the present value (PV) of $50,000 received 20 years from now,assuming the interest rate is 4% per year?

• A)$5,242.88
• B)$10,000.00
• C)$22,819.35
• D)$40,000.00

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for significant competitive pressure but some degree of pricing power.

Price-Output Decisions

The process by which firms decide at what production levels and prices they will operate to maximize profits.

Small Number

A numerical value considered low in quantity or magnitude, often contextually determined based on comparison or specific thresholds in various fields.

Rivals

Rivals are competitors within the same industry or market vying for the same customer base or resources, often engaging in competitive strategies to gain an advantage.