Assuming an Interest Rate of 10%, the Present Value of $20,000

question 115

Multiple Choice

Assuming an interest rate of 10%, the present value of $20,000 to be received 10 years from now would be closest to: Present Value of $1
Present Value of Annuity of $1

• A)$11,280.
• B)$7720.
• C)$51,880.
• D)$47,160.

---

Definitions:

Marginal Cost

The cost incurred by producing one additional unit of a product or service, crucial for decision-making in production levels.

Optimal Amount

The ideal quantity of a resource or good that achieves the best outcome or utility.

Positive Externalities

Benefits that result from a commercial activity or action but affect uninvolved third parties who did not choose to be involved in the transaction.

Spillover Benefits

Positive effects or advantages that result from a product, event, or activity, affecting those who are not directly involved.