What Is the Present Value (PV)of an Investment That Will

question 3

Multiple Choice

What is the present value (PV) of an investment that will pay $400 in one year's time,and $400 every year after that,when the interest rate is 5%?

• A)$2400
• B)$3600
• C)$7200
• D)$8000

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Definitions:

Wage

The fixed regular payment, typically calculated on an hourly, daily, or piecework basis, made by an employer to an employee.

Marginal Product

The additional output that is produced by adding one more unit of a specific input, keeping all other inputs constant.

Profit Maximize

The process by which a company determines the price and output level that returns the greatest profit, taking into account costs and demand.

Wage Rate

Wage Rate represents the standard amount of compensation a worker receives for performing a specific task or job, typically expressed per hour or per unit of work completed.