Present Value of 1 Future Value of 1

question 32

Multiple Choice

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Dave wants to retire now but isn't at the eligible retirement age to draw his pension. He has some investment savings and wants to be able to take out $25,000 at the end of each of the next 5 years. His investment pays an average of 6% annual interest. What is the present value of the funds that Dave will be drawing from his investment account?

• A)$125,000.00
• B)$117,500.00
• C)$41,666.67
• D)$93,412.50
• E)$105,310.00

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Definitions:

High-Low Method

A technique used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.

Variable Cost Element

A cost that varies directly with the level of production or sales volume, such as materials and direct labor.

Fixed Cost Element

The portion of total costs that does not change with the variation in activity level or production volume.

CVP Analysis

Cost-Volume-Profit Analysis, a tool used to determine how changes in costs and volume affect a company's operating income and net income.