Suppose You Win a Small Lottery and You Are Given

question 65

Multiple Choice

Suppose you win a small lottery and you are given the following choice: You can receive (1) an immediate payment of $5,000 or (2) two annual payments, each in the amount of $2,700, with the first payment coming one year from now, and the second payment coming two years from now. You would choose to take the two annual payments if the interest rate is

• A)2 percent, but not if the interest rate is 3 percent.
• B)3 percent, but not if the interest rate is 4 percent.
• C)4 percent, but not if the interest rate is 5 percent.
• D)5 percent, but not if the interest rate is 6 percent.

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Definitions:

Business Plan

is a formal written document that outlines a company's objectives, strategies, market analysis, financial forecasts, and operational requirements, serving as a roadmap for business success.

Financial

Refers to matters related to money, investments, lending, budgeting, saving, and forecasting.

Marketing Sections

Divisions within a business or organization focused on developing strategies to promote products or services to potential customers.

Inadequate Financing

Situations where there is not enough capital or funding available to support a business's operations or growth plans.