If an individual's cost of capital were 6%, the person would prefer to receive $110 at the end of one year rather than $100 right now.
PV = FV × PVIF (App. B: 6%, 1 period)
= $110 × 0.943 = $104

Question

Quizplus · Accepted Answer

The calculation is correct and shows that the present value of $110 received at the end of one year is $104, which is greater than the present value of $100 received right now. This means that the individual would prefer to receive $110 at the end of one year.

If an Individual's Cost of Capital Were 6%, the Person