Which of the Following Decisions Would Involve the Use of the Future

question 43

Multiple Choice

Which of the following decisions would involve the use of the future value of $1?

• A) Your brother buys your car and offers to pay you $500 now or $1,500 in two years.
• B) You win a lawsuit and are offered a lump-sum payment today of $100,000 or $15,000 a year for 20 years.
• C) Your father and mother wish to deposit enough money on the date of your high school graduation to enable you to take a $7,000 cruise when you graduate from college in 4 years.
• D) You want to have $1,000,000 in order to retire at age 55, but need to know how much you will need to deposit each year from now until your 55th birthday.

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Definitions:

CEOs Paid

Refers to the compensation, including salary, bonuses, and stock options, received by chief executive officers of corporations.

Average Employee

A hypothetical or statistical worker representative of the typical skill level, salary, and experience within a company or industry.

Economic Planning

The process by which government officials allocate resources and organize economic activities with the goal of achieving specific economic outcomes.

CEOs Pay

The compensation received by chief executive officers, including salary, bonuses, shares, and other financial rewards, often a subject of public debate regarding its fairness and impact on company performance.