Business decision makers use present value concepts to derive the terms of contracts like
A)mortgages.
B)leases.
C)pensions.
D)mortgages, leases, and pensions.

Question

Quizplus · Accepted Answer

Business decision makers use present value concepts for all three types of contracts - mortgages, leases, and pensions. Present value helps them determine the current value of future cash flows, which is important for making informed decisions about these long-term contracts. For example, when negotiating a lease, the present value of future rent payments can be calculated to determine the lease terms that will be fair for both parties. Similarly, in the case of pensions, present value is used to determine how much money should be contributed to fund the pension plan to ensure that future payments to retirees can be made.

Business Decision Makers Use Present Value Concepts to Derive the Terms