In Answering Which of the Following Questions Would You Find

question 6

Multiple Choice

In answering which of the following questions would you find it necessary to calculate a present value?

• A)Should Jane put $1,000 today into a 5-year certificate of deposit that pays 4 percent annual interest?
• B)Should ABC Corporation buy a factory today for $2 million,knowing that the factory will yield the corporation $3 million after 5 years?
• C)If Jill puts $5,000 today into a bank account that pays 3 percent interest,then how much will she have in the account after 2 years?
• D)You would find it necessary to calculate a present value in order to answer all of these questions.

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