Marshall Has Received an Inheritance and Wants to Invest a Sum

question 18

Multiple Choice

Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,000 at the end of each of the next 10 years.Assuming he can earn an interest rate of 5% compounded annually,how much of his inheritance must he invest today? (PV of $1,FV of $1,PVA of $1,and FVA of $1) $\bold{\text{(Use appropriate factor(s) from the tables provided.) }}$

• A)$50,000.00
• B)$47,500.00
• C)$45,125.00
• D)$38,608.50
• E)$100,000.00

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Definitions:

Rivals' Reactions

In business strategy and economics, the anticipated responses or actions of competing entities in reaction to a company's decisions or changes in the marketplace.

Game Theory

Analyzes the choices made by rival firms, people, and even governments when they are trying to maximize their own well-being while anticipating and reacting to the actions of others in their environment.

Oligopolistic Industries

Industries dominated by a small number of firms, leading to competitive conditions that fall between a monopoly and perfect competition.

Industrial Concentration

A measure of the extent to which production in an industry is dominated by a few large firms.