On January 1, 2009, You Are Considering Making an Investment

question 3

Multiple Choice

On January 1, 2009, you are considering making an investment that will pay three annual payments of $10,000. The first payment is not expected until December 31, 2012. You are eager to earn 3%. What is the present value of the investment on January 1, 2009?

• A)$28,286.
• B)$25,886.
• C)$26,662.
• D)$27,300.PVA = $10,000 x (5.41719* - 2.82861**) = $25,886 *PVA of $1: n=6; i=3% **PVA of $1: n=3; i=3%

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Definitions:

Corporate Cultures

The shared values, beliefs, and practices that characterize the environment within an organization.

Analogy Method

A problem-solving strategy that draws comparisons between a current situation and another analogous situation to find a similar solution.

Idea Growers

Individuals or entities that are skilled in developing, nurturing, and bringing new concepts or innovations to fruition.

Individual Creativity

The ability of a person to generate new ideas, solutions, or approaches independently.