Net Present Value

question 132

Multiple Choice

Net present value:

• A) is gross domestic product less depreciation.
• B) is sales volume less sales and excise taxes.
• C) is profit after taxes.
• D) ignores the time value of money.
• E) is the discounted value of a series of future cash receipts.

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Definitions:

Real GDP

The measure of the value of all goods and services produced within a country's borders, adjusted for inflation, over a specific time period.

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a given period, used as a broad measure of economic performance.

Deflation

A decrease in the general price level of goods and services, often leading to increased purchasing power of money.

Real GDP

The measurement of a country's economic output adjusted for price changes (inflation or deflation), reflecting the real quantity of goods and services produced.