Steve Fisher Is Saving for a New Car

question 84

Multiple Choice

Steve Fisher is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)

• A) $22,680
• B) $26,454
• C) $16,670
• D) $19,444

Identify and apply the requirements for measuring provisions and contingent liabilities.

Assess the treatment of warranties and onerous contracts under AASB 137.

Discern between the financial reporting treatment for recognized liabilities, provisions, and contingent liabilities.

Analyze the implications of future obligations and uncertain events on financial statements.

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Definitions:

Insurance Salespeople

Professionals who specialize in selling insurance policies to protect individuals and businesses from financial loss.

Representativeness Heuristic

A cognitive shortcut that involves making judgments about the probability of an event under uncertainty, based on how much it resembles the typical case.

Three-Number Sequence

A specific arrangement of three numbers that follows a particular rule or pattern, often used in cognitive and psychological testing.

Confirmation Bias

The tendency to search for, interpret, favor, and remember information in a way that confirms one's preexisting beliefs or hypotheses.