Present and Future Value Tables of $1 at 9% Are

question 3

Multiple Choice

Present and future value tables of $1 at 9% are presented below.

-Claudine Corporation will deposit $5,000 into a money market sinking fund at the end of each year for the next five years. How much will accumulate by the end of the fifth and final payment if the sinking fund earns 9% interest?

• A) $32,617.
• B) $29,924.
• C) $27,250.
• D) $26,800.

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Definitions:

Retained Earnings

Cumulative net income of a company that is retained within the business rather than distributed to shareholders as dividends.

Cost of Goods Sold

The total cost directly associated with producing goods, including materials and labor expenses, that a company sells during a specific period.

Collections

The process of recovering amounts owed to a business by its debtors or customers.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been deducted from total revenue.