Suppose Your Uncle Offers You $100 Today or $150 in 10

question 133

Multiple Choice

Suppose your uncle offers you $100 today or $150 in 10 years.You would prefer to take the $100 today if the interest rate is

• A)3 percent.
• B)4 percent.
• C)5 percent.
• D)None of the above is correct.

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Definitions:

Voting Shares

Shares that give the shareholder the right to vote on company matters, such as electing directors or approving acquisitions, indicating a degree of control in the company.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders.

Carrying Amount

The book value of assets and liabilities as reported in the financial statements, factoring in depreciation, amortization, and impairment.

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate policy and the selection of board members.