The Present Value of $1 Payable in Two Years Is

question 13

Multiple Choice

The present value of $1 payable in two years is

• A)$1.
• B)$1/(1 + 2r).
• C)$1/(1 - 2r).
• D)$1/(1 + r)2.

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Definitions:

Accounting

The systematic process of recording, analyzing, summarizing, and reporting the financial transactions of a business or individual.

Direct Costs

Expenses that can be directly attributed to the production of specific goods or services, such as materials and labor.

Indirect Costs

Costs that are not directly traceable to a product, process, or activity but are necessary for the business’s overall operations, such as utilities or administrative salaries.

Stock Issue Costs

Expenses associated with issuing new shares of stock, including underwriting, legal, and registration fees.