1.

What is the present value of the following payments (with Year 1 indicating a payment made 1 year from now), using a 10% discount rate?

Year 1: $2,000

Year 2: $3,500

Year 3: $3,000

Group of answer choices

$6,965

$6,386

$7,483

$7,006

$6,950

2.

The present value of a single future payment:

Group of answer choices

decreases as the interest rate decreases.

increases as the time period decreases.

is inversely related to the future value.

rises as the interest rate rises.

3.

Todd and Cathy created a firm that is a separate legal entity and will share ownership of that firm on a 50-50 basis. Which type of entity did they create if they have no personal liability for the firm's debts?

Group of answer choices

Corporation

Sole proprietorship

Limited partnership

Public company

General partnership

4.

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

Group of answer choices

Territorial

Organizational

Structural

Formation

Agency