Suppose the Interest Rate Is 8 Percent

question 178

Multiple Choice

Suppose the interest rate is 8 percent.Consider three payment options:
1) $200 today.
2) $220 one year from today.
3) $240 two years from today.
Which of the following is correct?

• A)Option 1 has the highest present value and Option 2 has the lowest.
• B)Option 2 has the highest present value and Option 3 has the lowest.
• C)Option 3 has the highest present value and Option 1 has the lowest.
• D)None of the above is correct.

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Definitions:

Job Insecurity

The fear or risk of losing one's job without the prospect of finding another of equal value.

Career Management

The ongoing process of setting personal career goals, developing strategies for achieving them, and monitoring progress, often with the assistance of employers or professionals.

Inplacement

Reabsorbing excess or inappropriately placed workers into a restructured organization.

Outplacement

Assistance provided by an organization to former employees transitioning to new jobs, often including career counseling, job search assistance, and training.