What Is the Future Value of the Following Cash Flows $$\frac { \text { Year } 1 } { \$ 6,800 } \quad \frac { \text { Year } 2 } { \$ 2,100 } \quad \frac { \text { Year } 3 } { \$ 0 }$$

question 46

Multiple Choice

What is the future value of the following cash flows at the end of year 3 if the interest rate is 7.25%? The cash flows occur at the end of each year. $$\frac { \text { Year } 1 } { \$ 6,800 } \quad \frac { \text { Year } 2 } { \$ 2,100 } \quad \frac { \text { Year } 3 } { \$ 0 }$$

• A)$8,758.04
• B)$8,806.39
• C)$10,073.99
• D)$10,314.00
• E)$10,804.36

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Definitions:

Cost Curves

Graphical representations of the costs associated with producing varying quantities of output, illustrating concepts like marginal and average cost.

Purely Competitive Industries

Industries in which many firms sell identical products to many buyers and no single seller can influence the market price.

Economic Losses

The difference when total costs, including both explicit and implicit costs, exceed total revenues, indicating that resources could be better employed elsewhere.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, representing excess returns over the firm's opportunity costs.