If the Interest Rate Is 9%, the One-Year Discount Factor

question 68

Multiple Choice

If the interest rate is 9%, the one-year discount factor is equal to ________.

• A) 0.090
• B) 1.090
• C) 0.917
• D) 0.981

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of a business, whichever is longer.

Net Sales

The net sales of a company, which are calculated by deducting returns, allowances for damaged or missing items, and discounts from total sales.

Credit Sale

A transaction where goods or services are provided to a customer with an agreement to pay at a later date.

Gross Profit

The difference between revenue and the cost of goods sold, representing the profit a company makes after deducting the costs associated with making and selling its products or services.