On January 1, 2013, You Are Considering Making an Investment

question 91

Multiple Choice

On January 1, 2013, you are considering making an investment that will pay three annual payments of $10,000. The first payment is not expected until December 31, 2015. You are eager to earn 3%. What is the present value of the investment on January 1, 2013?

• A)$26,662.
• B)$27,462.
• C)$28,286.
• D)$29,135.

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Definitions:

FOB Shipping Point

Freight terms indicating that the seller places goods free on board the carrier, and the buyer pays the freight costs.

Freight Costs

The expenses associated with transporting goods from one location to another.

Inventoriable Costs

Costs that are considered as assets on the balance sheet when incurred and then become cost of goods sold when the product is sold.

Warehousing Departments

Sections within a company dedicated to storing goods until they are sold or distributed.