Suppose Carlos Has a 60 Percent Chance of Not Collecting

question 46

Multiple Choice

Suppose Carlos has a 60 percent chance of not collecting $100,000 when his rich uncle dies in 10 years.Juanita wants to buy the rights to this possible inheritance from Carlos.How much is the possible inheritance currently worth to Carlos? Assume the interest rate is 9 percent.

• A)$94,695.
• B)$25,345.
• C)$16,896.
• D)$142,042.

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Definitions:

Importers Of Food

Entities that bring food products into a country from abroad, often subject to regulatory health and safety standards.

U.S. Safety Standards

Regulations and guidelines set forth to ensure the safety and health of consumers and workers in the United States.

Creditors

Individuals or institutions to whom money is owed by debtors or borrowers.

Credit-Reporting Agencies

Entities that collect and disseminate information about the credit history of individuals and businesses.