In answering which of the following questions would you find it necessary to calculate a present value?
A)Should Ryan put $2,000 today into a 5-year certificate of deposit that pays 5percent annual interest?
B)Should XYZ Corporation buy a factory today for $4 million, knowing that the factory will yield the corporation $5 million after 4 years?
C)If Ellie puts $1,000 today into a bank account that pays 4 percent interest, then how much will she have in the account after 3 years?
D)If William lends his friend Miya $450, how much will she owe him in a year if she insists on paying 5 percent interest?

Question

Quizplus · Accepted Answer

Calculating present value is necessary to determine if the future cash inflow of $5 million is worth the $4 million investment today.

In Answering Which of the Following Questions Would You Find