The Present Discounted Value of $75 to Be Received in Two

question 173

Multiple Choice

The present discounted value of $75 to be received in two years with no interest is ____ when the interest rate is 8 percent.

• A)$64.30
• B)$69.44
• C)$87.48
• D)$75
• E)$81

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Definitions:

Financial Accounting Information

The collection of financial data and statements that companies use to report their financial performance to external parties.

Creditor

An individual or institution that lends money or extends credit, expecting repayment in the future.

Basic Accounting Equation

The Basic Accounting Equation is the foundational principle of double-entry bookkeeping, stating that Assets = Liabilities + Equity, maintaining the balance of a company's financial statements.

Equipment

The tangible assets used in the operation of a business to perform specific tasks, excluding real estate and facilities.