The Present Value of $100,000 at 5% to Be Received

question 55

True/False

The present value of $100,000 at 5% to be received at the end of ten years will be greater than the present value of $100,000 at 6% to be received at the end of ten years.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Accounts Receivable

Money owed by customers to a company for goods or services provided on credit.

Notes Receivable

A customer’s written promise to pay an amount and possibly interest at an agreed-upon rate.

Allowance Method

The method of accounting for uncollectible accounts that provides an expense for uncollectible receivables in advance of their write-off.