What Is the Present Value (PV) of an Investment

question 57

Multiple Choice

What is the present value (PV) of an investment?

• A) the amount by which the cash flow of an investment exceeds or falls short of the cash flow generated by the same amount of money invested at the market rate
• B) the amount you need to invest at the current interest rate to re-create the cash flow from the investment
• C) the difference between the cost of the investment and the benefit of the investment in dollars today
• D) the amount that an investment would yield if the benefit were realised today

---

Definitions:

Mistake

An action or judgment that is misguided or wrong.

McClelland's Learned Need

A theory suggesting that people's needs for achievement, power, and affiliation are acquired over time based on their life experiences.

Motivation Model

Theoretical frameworks that aim to explain the drive behind individuals' actions, desires, and needs.

Deficiency Needs

In Maslow's hierarchy of needs, these are the basic requirements for physical and psychological well-being that individuals are motivated to fulfill before achieving higher level growth needs.