Present Value: John Hsu Wants to Start a Business in 10

question 24

Multiple Choice

Present value: John Hsu wants to start a business in 10 years. He hopes to have $100,000 at that time to invest in the business. To reach his goal, he plans to invest a certain amount today in a bank CD that will pay him 9.50 percent annually. How much will he have to invest today to achieve his target? (Round to the nearest dollar.)

• A) $54,233
• B) $63,837
• C) $91,324
• D) $40,351

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Definitions:

Return On Total Assets

A financial ratio that measures a company's efficiency in using its assets to generate profit, calculated by dividing net income by total assets.