The Following Information Pertains to an Investment: Ignore Income

question 62

Multiple Choice

The following information pertains to an investment: Ignore income taxes.The present value of the salvage value (rounded) is

• A) $4,848.
• B) $5,738.
• C) $6,228.
• D) $6,448.

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Definitions:

Face Value

The original value of a financial instrument as indicated on the certificate or instrument itself, equivalent to its par value.

Market

A venue or medium where buyers and sellers come together to exchange goods, services, or financial instruments.

Coupon Rate

The percentage annually paid as interest on a bond, relative to its face value.

Market Interest Rate

The prevailing rate of interest determined by supply and demand in the money market.