Use This Information to Answer the Following Question What Amount Must Be Deposited Today So That $600 May

question 130

Multiple Choice

Use this information to answer the following question. $$\begin{array} { | c | c | c | } \hline \text { Periods } & \text { Present Value of } \$ 1 \text { at } 7 \text { Percent } & \text { Present Value of Ordinary Annuty of } \\&& \$ 1 \text { at } 7 \text { Percent } \\1 & 0.935 & 0.935\\\hline 2 & 0.873 & 1.808\\\hline 3 & 0.816 & 2.624 \\\hline\end{array}$$ What amount must be deposited today so that $600 may be withdrawn at the end of each year for three years?

• A) $1,800.00
• B) $1,925.14
• C) $1,574.40
• D) $1,683.00

---

Definitions:

Debt-Equity Ratio

A measure that indicates the balance between equity contributed by shareholders and debt employed to finance company assets.

Return On Equity

A gauge of corporate profitability that indicates the profit made from the investments of its shareholders.

Return On Assets

A financial ratio that indicates the percentage of profit a company earns in relation to its overall resources. It demonstrates how effectively a company is using its assets to generate earnings.

Average Collection Period

A measure of the average number of days it takes a company to collect payments from its credit sales.