You Have a Choice Among Three Options

question 97

Multiple Choice

You have a choice among three options. Option 1: receive $900 immediately. Option 2: receive $1,200 one year from now. Option 3: receive $2,000 five years from now. The interest rate is 15 percent. Rank these three options from highest present value to lowest present value.

• A)Option 1; Option 2; Option 3
• B)Option 3; Option 2; Option 1
• C)Option 2; Option 3; Option 1
• D)Option 3; Option 1; Option 2

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Definitions:

Dwarf Varieties

Plant breeds specifically cultivated to be smaller in size, often used in compact gardening spaces or for decorative purposes.

Agriculture

The practice of cultivating soil, growing crops, and raising livestock for food, fiber, medicinal plants, or other products used to sustain and enhance human life.

Law of Diminishing Returns

An economic principle stating that adding more of one factor of production, holding all else constant, will at some point yield lower per-unit returns.

Dramatic Yields

Significant increases in productivity, often used in the context of agricultural output resulting from new technologies or methods.