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:

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Fresh Fruit Smoothies

Blended beverages made from fresh fruits, often combined with ice, yogurt, or milk, offering a healthy and refreshing option.

Distributorship

An arrangement in which a manufacturer or another supplier grants a business the right to sell its products.

Manufactured

The process of converting raw materials into finished goods through the use of equipment, labor, and processes.