If the Single Amount of $5,000 Is to Be Received

question 164

Multiple Choice

If the single amount of $5,000 is to be received in 3 years and discounted at 6%, its present value is:

• A) $4,200.
• B) $4,450.
• C) $5,000.
• D) $5,300.

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Definitions:

Entity Approach

A method in merger and acquisition accounting where the acquiring and target companies are treated as combining their interests, forming a new reporting entity.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders.

IFRS

International Financial Reporting Standards, a set of accounting guidelines that dictate how financial statements should be reported around the world.

Realized and Unrealized Gains

Profits made from the sale of assets (realized gains) versus increases in the value of assets still held (unrealized gains).