The Solution to This Problem Requires Time Value of Money

question 33

Multiple Choice

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations.
-
How much would have to be deposited in a savings account earning 6%,so that equal annual withdrawals of $200 can be made at the end of each of ten years? The balance at the end of the last year would be zero.

• A)$528
• B)$1,472
• C)$2,000
• D)$2,636

---

Definitions:

Continuous Review

A system of managing inventory where the stock levels are continuously monitored, with orders placed as soon as inventory drops to a predetermined level.

Safety Inventory

A quantity of stock kept on hand to prevent stockouts due to variability in supply or demand.

Product Availability

The extent to which a product can be purchased at any given time and location.

Coefficient of Variation

A statistical measure of the dispersion of data points in a data series around the mean, expressed as a ratio to the mean.