Present Value of 1 Future Value of 1

question 56

Multiple Choice

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company needs to have $150,000 in 5 years, and will create a fund to insure that the $150,000 will be available. If it can earn a 6% return compounded semiannually, how much must the company invest in the fund today to equal the $150,000 at the end of 5 years?

• A)$141,000
• B)$112,095
• C)$100,000
• D)$111,615
• E)$105,000

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Definitions:

Oligopoly

A market structure characterized by a small number of firms that have significant control over market prices and competition levels.

Barriers To Entry

Obstacles or hindrances that make it difficult for new competitors to enter a market or industry.

Herfindahl Index

A measure of market concentration that squares the market share of each firm competing in the market and sums the resulting numbers.

Oligopolistic Industry

A market structure characterized by a small number of large firms dominating the industry, leading to limited competition.