Randy Has to Choose Between Two Cash Flows

question 33

True/False

Randy has to choose between two cash flows. He could either receive the future value of an investment of $1,000 at 8 percent annually in three years or in five years. Randy should always choose the shorter investment term because it is worth more today.

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Definitions:

Buyer

An individual or entity that purchases goods or services for personal use, resale, or to incorporate into the production of other goods.

Tax

An essential monetary charge or dissimilar levy exacted upon a taxpayer by a government sector to facilitate government expenses and diverse expenditures for the public.

Unique

Being the only one of its kind; unlike anything else.

Inelastic Demand

A situation where the demand for a good or service is relatively unaffected by changes in price, indicating that the quantity demanded changes very little with price fluctuations.