(Ignore Income Taxes in This Problem

question 6

Multiple Choice

(Ignore income taxes in this problem.) In order to receive $12,000 at the end of three years and $10,000 at the end of five years,how much must be invested now if you can earn 14% rate of return?

• A) $12,978
• B) $8,100
• C) $13,290
• D) $32,054

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Definitions:

Financial Accounting Standards Board

An independent organization responsible for establishing and improving financial accounting standards in the United States.

Economic Entity Assumption

A fundamental principle in accounting that separates the transactions of a business from those of its owners or other businesses.

Sole Proprietorship

A business structure owned by a single individual, where the owner is personally responsible for all financial obligations and liabilities.

Personal Economic Events

This refers to financial transactions and activities that directly affect an individual's economic situation, such as income, expenditures, savings, and investments.