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problem1: Given some amount to be received several years in the future, if the interest rate increases, the present value of the future amount will be:

[A] Stay the same

[B] Cannot tell

[C] Higher

[D] Lower

[E] Variable

problem2: The future value of a dollar as the interest rate increases and the farther in the future an initial deposit is to be received.

[A] Increases; increases

[B] Increases; decreases

[C] Decreases; decreases

[D] Decreases; increases

problem3: The IRR of a capital investment:

[A] Must exceed the cost of capital in order for the firm to accept the investment

[B] Is similar to the yield to maturity on a bond

[C] Changes when the cost of capital changes

[D] Is equal to the annual net cash flows divided by one half of the project’s cost when the cash flows are an annuity.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M921168

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