Which,if Any,of the Present Values Below Are Computed Correctly

question 190

Multiple Choice

Which,if any,of the present values below are computed correctly?

• A)A payment of $100 to be received one year from today,with a 2 percent interest rate,has a present value of $98.81.
• B)A payment of $200 to be received two years from today,with a 3 percent interest rate,has a present value of $188.52.
• C)A payment of $300 to be received three years from today,with a 4 percent interest rate,has a present value of $234.34.
• D)None of the above are correct to the nearest cent.

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Definitions:

Liabilities

Financial obligations or debts that a company owes to others, which need to be settled over time.

Assets

Economic resources owned or controlled by an entity, expected to produce value or benefit in the future.

Cycle Inventory

Inventory that is carried as a result of the production or purchase process, determined by the frequency of orders and the quantity of goods ordered each time.

Demand Variability

The extent to which demand can fluctuate over a period of time, impacting inventory management and planning processes.