If the interest rate is 10 percent and cash flows are $1,000 at the end of year one and $2,000 at the end of year two, then the present value of these cash flows is:
A. $2,562.
B. $439.
C. $3,000.
D. $3,200.
Answer: A
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Which of the following is most likely to have contributed to better inventory management?
a. Stability in the market demand b. Stability in the average price level c. Perfect forecasting by the firms d. Reduced variability in the input costs e. Improvements in information technology and communication
Federal law now requires that a majority of the directors on the board of a corporation be? _______.
A. top management of the corporation B. independent C. competitors D. employees in the same industry E. sole proprietors
The process by which financial institutions accept savings from businesses, households and governments and lend the savings to other businesses, households and governments is
A. adverse selection. B. moral hazard. C. asymmetric information. D. financial intermediation.
The Bureau of Labor Statistics has taken several steps to reduce the bias in the consumer price index. Which of the following is not one of the steps taken to reduce the bias?
A) updating the market basket every two years, rather than every 10 years B) using statistical methods to reduce the size of the quality bias C) conducting a point-of-purchase survey to track where consumers actually make their purchases D) incorporating substitutions by consumers when prices of specific products rise rapidly