The Difference Between the Present Value of an Investment and Its

question 5

Multiple Choice

The difference between the present value of an investment and its cost is the:

• A)net present value.
• B)internal rate of return.
• C)payback period.
• D)profitability index.
• E)discounted payback period.

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Definitions:

Medical Savings Account

A tax-exempt account established to pay for medical expenses, often used in conjunction with high-deductible health insurance policies to cover out-of-pocket costs.

High Deductible

A health insurance plan with lower premiums and higher deductibles than a traditional health plan, emphasizing consumer-driven health care.

Group Insurance Plan

A type of insurance policy that covers a defined group of people, typically employees of a company, offering them benefits at a reduced cost.

Individual Insurance Plan

A health insurance policy purchased by an individual, as opposed to being provided by an employer.