A Delivery Service Is Buying 600 Tires for Its Fleet

question 72

Multiple Choice

A delivery service is buying 600 tires for its fleet of vehicles.One supplier offers to supply the tires for $85 per tire,payable in one year.Another supplier will supply the tires for $20,000 down today,then $50 per tire,payable in one year.What is the difference in PV between the first and the second offer,assuming interest rates are 8.5%?

• A)$1000
• B)$276
• C)$645
• D)-$1000

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Definitions:

Population Standard Deviation

The standard deviation of the entire population under study, representing the total variability within the population data.

Observed Z Value

A standardized statistic that represents the number of standard deviations a data point is from the mean of a distribution.

Sample Mean

The average value of a sample set of a population, used as an estimate of the population mean.

Population Average

The mean value of a particular characteristic in a specified population, representing a central tendency.