If You Want to Know the Present Value of a Future

question 197

Multiple Choice

If you want to know the present value of a future payment received in one year, what formula can you use?

• A)Present value equals future payment times the current market rate of interest.
• B)Present value equals future payment divided by one plus the rate of interest.
• C)Present value equals one plus the rate of interest in decimals divided by future payment.
• D)Present value equals future payments times one plus the rate of interest.

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Definitions:

Six Sigma

A set of techniques and tools for process improvement, aiming at reducing defects and variability in manufacturing and business processes to improve quality and efficiency.

Control Chart

A graphical tool used in process control to display how a process varies over time and whether it remains within predefined limits.

Defects Per Unit

The average number of defects found in each unit of output or product.