The Present Value of $7,500 to Be Received Each Year

question 28

Multiple Choice

The present value of $7,500 to be received each year for five years and earning an 10 percent return (rounded) is

• A)$28,433.
• B)$8,250.
• C)$14,717.
• D)$33,750.

---

Definitions:

Tax Per Unit

A tax that is levied on a product based on the amount of the product sold, not on its value.

Consumer Surplus

The incongruity between what consumers are willing to expend on a good or service and what they truly expend.

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual amount they receive.

Opportunity Cost

Opportunity cost represents the value of the best alternative that must be forgone as a result of choosing another option.