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Year Discount Factor Quiz

The present value of $115,000 expected to be received one year from today at an interest rate (discount rate) of 10% per year is:

A two-year discount factor at a discount rate of 10% per year is:

If the one year discount factor is 0.8333, what is the discount rate (interest rate) per year?

If the present value of $444 to be paid at the end of one year is $400, what is the one year discount factor?

If you invest $100,000 today at 12% interest rate for one year, what is the amount you will have at the end of the year?

If the present value of a cash flow generated by an initial investment of $100,000 is $120,000, what is the NPV of the project?

The following statements regarding the NPV rule and the rate of return rule are true except:

A building is purchased for $300,000 and later sold for $365,000. All other things being equal, what is the return on the investment in the building?

The opportunity cost of capital for a risky project is

Mrs. Smith has $100 today. She wants to purchase goods that cost $50 right now. If she makes the purchase and then invests the rest at 10% for one year, how much can she consume next year?