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

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Definitions:

FIFO Inventory Method

An approach to valuing inventory that assumes the first items purchased are the first ones sold, leading to older inventory costs being assigned to cost of goods sold.

Cost of Goods Sold

Costs incurred directly from producing the goods a company offers, encompassing labor and material expenses.

Physical Inventory

A physical count of merchandise or commodities an organization has on hand at a specific time.

FOB Shipping Point

A term used in shipping contracts to indicate that the buyer assumes responsibility for the goods and the shipping costs from the point of departure.