A Business Promises to Pay the Investor of $2 000

question 32

Multiple Choice

A business promises to pay the investor of $2 000 today with a payment of $500 in one year's time, $1 000 in two years' time and $1 000 in three years' time. What is the net present value of this business opportunity if the interest rate is 5% per year?

• A)$247.06
• B)$256.88
• C)$253.78
• D)$261.07

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Definitions:

Marketing Strategy

A comprehensive plan designed to achieve the marketing objectives of a business, maximizing the market potential of its products or services.

Target Market

The specific group of consumers at whom a company aims its products and services.