The Rate of Return Is 10% and the Cash to Be

question 35

Multiple Choice

The rate of return is 10% and the cash to be received in one year is $10,000. Determine the present value amount, using the following partial table of present value of $1 at compound interest: $$\begin{array} { | l | l | l | l | } \hline 12 \% & 10 \% & 6 \% & \text { Year } \\\hline 0.893 & 0.909 & 0.943 & 1 \\\hline 0.797 & 0.826 & 0.890 & 2 \\\hline 0.712 & 0.751 & 0.840 & 3 \\\hline 0.636 & 0.683 & 0.792 & 4 \\\hline & & &\end{array}$$

• A) $8,930
• B) $9,000
• C) $9,430
• D) $9,090

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Definitions:

Economically Productive

Activities or processes that generate goods or services which have value and contribute to the economy.

Convey Information

The act of communicating or transmitting information from one entity to another.

Service Industries

Sectors of the economy that provide intangible products such as healthcare, education, and financial services.

Monopolistically Competitive

Describes a market structure where many companies sell products that are similar but not identical, allowing for competition based on price, quality, and marketing.