The Interest Rate Used to Find the Present Value of a Future

question 81

Multiple Choice

The interest rate used to find the present value of a future cash flow is the

• A)prime rate.
• B)discount rate.
• C)cutoff rate.
• D)internal rate of return.

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Definitions:

Loans

Financial arrangements in which a lender provides funds to a borrower with the expectation of repayment over time, typically with interest.

Financial Institutions

Organizations that provide financial services to their clients or members, including banks, credit unions, investment companies, and insurance companies.

Start-Up Funds

Capital that is required to start a new business, covering initial operational costs and investments.

Business Incubators

Organizations or programs designed to support the successful development of entrepreneurial companies through an array of business resources and services.