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:

Optimism

A mindset marked by optimism and assurance in achieving success and a bright outlook for the future.

Confidence

The feeling or belief in one's abilities or qualities, typically leading to a sense of self-assurance.

Positive Psychological Attributes

Traits or qualities of an individual that contribute to their overall psychological well-being, such as optimism, resilience, and gratitude.

Confidence

A belief in one's abilities and qualities, often leading to a sense of self-assurance and assertiveness.