A Donor Agrees to Contribute $5,000 Per Year at the End

question 54

Multiple Choice

A donor agrees to contribute $5,000 per year at the end of each of the next five years to a voluntary health and welfare organization.The donor did not place any use restrictions on the amount pledged.The stream of the payments is discounted at 6 percent.The first payment of $5,000 is received at the end of the first year.The present value factor for a five-payment annuity due on June 30,20X9,at 6 percent is 4.2124.The present value factor for a four-payment annuity due on June 30,20X9,at 6 percent is 3.4651.
-Based on the preceding information,the increase in present value of the contributions receivable recognized at the end of the first year equals:

• A)$5,000.
• B)$1,264.
• C)$4,212.
• D)$787.

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Definitions:

Rite Of Passage

A ritual or ceremony that marks a significant transition or stage in a person's life, such as puberty or marriage.

Initiation Ceremony

A formal event or series of actions conducted to admit someone into a new status or community.

Moral Intuition

Instantaneous judgments of right and wrong that occur without conscious deliberation, often based on emotional reactions.

Blood-Brain Barrier

A selective semipermeable barrier that shields the brain from foreign substances in the blood that might harm it, while allowing essential nutrients to pass through.