1. Why does the United States have a strong reputation for creditworthiness?
a) because no country has as many taxable states as the United States
b) Because america's wealth means that it does not have to borrow
c) because it has the right to tax the wealthiest population on earth
d) because dollars are backed by the gold at Fort Knox
2. Find the following values for a lump sum assuming annual compounding:
The future value of $500 invested at 8 percent for 1 year
The future value of $500 invested at 8 percent for 5 years
The present value of $500 to be received in 1 year when the opportunity cost rate is 8 percent
The present value of $500 to be received in 5 years when the opportunity cost rate is 8 percent
Analyze present and future values and their implications for the balance sheet and the budget of an organization.