If You Want to Know the Present Value of a Future

question 197

Multiple Choice

If you want to know the present value of a future payment received in one year, what formula can you use?

• A)Present value equals future payment times the current market rate of interest.
• B)Present value equals future payment divided by one plus the rate of interest.
• C)Present value equals one plus the rate of interest in decimals divided by future payment.
• D)Present value equals future payments times one plus the rate of interest.

---

Definitions:

Value Marginal Product

The additional revenue generated by employing one more unit of a factor of production, such as labor or capital.

Skilled Labor

Workers who have specialized training, education, or experience that is valuable for specific jobs, industries, or tasks.

Unskilled Labor

Workforce sector comprising individuals without specialized training or qualifications, often employed in tasks that require manual efforts.

Marginal Productivity

The additional output that is produced by employing one more unit of a factor of production, holding all other factors constant.