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You have received a settlement offer from an automobile manufacturer due to mechanical problems with your automobile. The manufacturer will pay you $47,000 in one lump sum five years from now. You can earn 5% on your investments. The present value of $1 for 5 periods at 5% is 0.784. The present value of an ordinary annuity of $1 for 5 periods at 5% is 4.329 The present value of the manufacturer's settlement offer is closest to OA. $203,463 OB. $47,000 OC. $34,545 OD. $36,848 ALR

You have received a settlement offer from an automobile manufacturer due to mechanical problems with your automobile. The manufacturer will pay you $47,000 in one lump sum five years from now. You can earn 5% on your investments. The present value of $1 for 5 periods at 5% is 0.784. The present value of an ordinary annuity of $1 for 5 periods at 5% is 4.329 The present value of the manufacturer's settlement offer is closest to OA. $203,463 OB. $47,000 OC. $34,545 OD. $36,848 ALR

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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K A You have received a settlement offer from an automobile manufacturer due to mechanical problems with your automobile. The manufacturer will pay you $47,000 in one lump sum five years from now. You can earn 5% on your investments. The present value of $1 for 5 periods at 5% is 0.784 The present value of an ordinary annuity of $1 for 5 periods at 5% is 4.329. The present value of the manufacturer's settlement offer is closest to OA. $203,463 OB. $47,000 OC. $34,545 OD. $36,848 $7 CAR
Transcribed Image Text:K A You have received a settlement offer from an automobile manufacturer due to mechanical problems with your automobile. The manufacturer will pay you $47,000 in one lump sum five years from now. You can earn 5% on your investments. The present value of $1 for 5 periods at 5% is 0.784 The present value of an ordinary annuity of $1 for 5 periods at 5% is 4.329. The present value of the manufacturer's settlement offer is closest to OA. $203,463 OB. $47,000 OC. $34,545 OD. $36,848 $7 CAR
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