Use the Table for the Question(s)below

question 41

Multiple Choice

Use the table for the question(s) below.
Suppose the term structure of interest rates is shown below:

-Consider an investment that pays $1 000 at the end of each of the next four years. If the investment costs $3 500 and has a net present value (NPV) of $74.26, then the four-year risk-free interest rate is closest to:

• A)4.53%
• B)4.55%
• C)4.5%
• D)4.58%

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Definitions:

Book Value

The net value of an asset as recorded on the balance sheet, calculated as the original cost minus accumulated depreciation or amortization.

Salaries Payable

An account that represents the amounts owed to employees for work performed that has not yet been paid.

Salary Expense

The total amount paid by a business to its employees for the work done over a specific period, often monthly or annually.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.