Leon's Has a "Don't Pay for One Year" Event on Right

question 69

Multiple Choice

Leon's has a "Don't Pay For One Year" event on right now at the store,so you purchase an Italian,hand-stitched leather sofa.You will pay $1,267.99 for the sofa in one year.You have a savings account that pays 3% annual interest.How much must you deposit in your account today in order to have enough money to pay for the sofa in one year?

• A) $1,231.06
• B) $1,267.99
• C) $1,195.20
• D) $1,230.56
• E) $1,337.21

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Definitions:

Direct Method

A cash flow statement preparation approach that lists major operating cash receipts and payments, providing a clearer view of cash flow sources and uses.

Total Assets Ratio

A financial ratio comparing the total assets of a company to another financial metric, often used to assess a company's leverage or investment efficiency.

Long-Term Assets

Assets expected to provide economic benefits over a period longer than one year, such as buildings, machinery, and land.

Total Assets Ratio

A financial metric that measures the efficiency of a company's use of its assets to generate revenue.