What Is the Present Value of $2,000 to Be Received

question 96

Multiple Choice

What is the present value of $2,000 to be received in six years if interest rates are 8% compounded semiannually? (Round to the nearest whole dollar)

• A) $1,258
• B) $1,249
• C) $1,852
• D) $1,158
• E) $1,923

---

Definitions:

Activity Cost Pools

A method in activity-based costing that aggregates all indirect costs associated with a particular activity, allowing for more precise allocation of overheads to products or services.

Organization-Sustaining Activities

Activities that are carried out regardless of which customers are served, which products are produced, how many batches are run, or how many units are made.

First-Stage Allocations

The process of assigning overhead costs to different departments or cost pools as a first step in allocating costs to individual products or services.

ABC System

Refers to Activity-Based Costing System, a method of assigning costs to products or services based on the resources they consume.