1.  If the present value of the cash flow X is $240, and the present value cash flow Y $160, then 

the present value of the combined cash flow is:  

a. $240 

b. $160 

c. $80 

d. $400 

 

2.  If the 2-year discount factor is 0.64, what is the rate of interest (in APR)?  

a. 10% 

b. 25% 

c. 40% 

d. None of the above 

 

3.  What is the present value of the following cash flow at a discount rate of 9%?  

a. $372,431.81 

b. $450,000 

c. $405,950.68 

d. None of the above 

 

4.  At an interest rate of 10%, which of the following cash flows should you prefer?  

Year 1 Year 2 Year 3  

a. 500 300 100 

b. 100 300 500 

c. 300 300 300 

d. Any of the above as they all add up to $900 

    • 10 years ago
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