Moving Cash Flows What Is the Value in Year 3

question 6

Multiple Choice

Moving Cash Flows What is the value in year 3 of a $250 cash flow made in year 15 when interest rates are 12 percent?

• A)$45.67
• B)$64.17
• C)$177.95
• D)$220.00

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Definitions:

Efficient Allocations

An economic condition where resources are distributed in the most effective manner, allowing for the optimization of outputs from given inputs without waste.

Contract Curve

In economics, it represents the locus of points indicating the optimal distribution of resources between parties in an Edgeworth box diagram.

Indifference Curve

A graph showing combinations of two goods that give a consumer equal satisfaction and utility.

Efficient Allocation

The optimal distribution of resources and goods to maximize the net benefit or welfare within an economy.