Suppose You Have a Choice Between Receiving a Lump-Sum Payment

question 25

Multiple Choice

Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment one year from today) .Of the following,which is the lowest annual interest rate at which you would prefer the lump-sum payment over the four annual payments?

• A)2%
• B)​5%
• C)​7%
• D)​10%

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Definitions:

Human Resource Forecasting

The process of estimating the future human resource needs of an organization, including the number and types of employees required.

Regression Analysis

A statistical method used to determine the strength and character of the relationship between one dependent variable and one or more independent variables.

Linear Equation

An algebraic equation in which each term is either a constant or the product of a constant and a single variable, and it graphically represents a straight line.

Causal Variable

A causal variable is a factor that directly influences the outcome of an experiment or study, indicating a cause-and-effect relationship.