Drew Receives an Inheritance That Pays Him $54,000 Every Three

question 90

Multiple Choice

Drew receives an inheritance that pays him $54,000 every three months for the next two years. Which of the following is closest to the present value (PV) of this inheritance if the interest rate is 8.9% (EAR) ?

• A) $314,366
• B) $471,549
• C) $392,957
• D) $432,000

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Definitions:

Collective Bargaining

The process of negotiation between employers and a group of employees aimed at reaching agreements to regulate working conditions.

Contingent Workers

Employees who do not have a permanent or long-term contract with their employer, often working on a temporary or freelance basis.

Labor Union

An organization representing workers from various trades or professions, aimed at negotiating wages, work rules, complaint procedures, and working conditions for its members.

Form

The structure, arrangement, or mode of organization of something, often relating to documents, artistic expression, or physical objects.