What Is the Present Value of a Payment of $2,000

question 134

Multiple Choice

What is the present value of a payment of $2,000 to be received two years from today if the interest rate is 5%?

• A)$2205
• B)$2200
• C)$1818.18
• D)$1814.06

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Definitions:

Sales Revenue

The income received by a company from its sales of goods or the provision of services.

Gross Profit

The difference between revenue and the cost of making a product or providing a service, before deducting overheads, payroll, taxation, and interest payments.

Inventory Costing Method

A method used to assign costs to inventory, affecting how costs are reported in the financial statements.

Year-End Purchase

Acquisitions or purchases made by a company close to the end of its fiscal year, often impacting the annual financial statements.