How Much Money Would You Have to Deposit Today to Create

question 63

Multiple Choice

How much money would you have to deposit today to create an income stream that pays $10,000 one year from today and continues to make annual payments forever,with payments after the first $10,000 growing at 4% per year? Assume money that you invest today to fund this income stream earns a 7% rate of return.

• A)$142,857
• B)$250,000
• C)$1,250,000
• D)$333,333

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Definitions:

Operations Execution

The strategic implementation of procedures and tasks necessary for the successful production of goods or services.

Worker Dissatisfaction

A condition where employees feel unhappy, unfulfilled, or frustrated with their work environment or job roles.

Profits

The profit made when the income generated from business operations is greater than the expenses, costs, and taxes required to maintain the operations.

Process Reengineering

The essential reconsideration and complete overhaul of business operations to attain significant enhancements in vital performance metrics, including cost, quality, service, and speed.