The Excel Formula to Compute the Net Present Value of Cash

question 36

Multiple Choice

The Excel formula to compute the net present value of cash flows for a $55,000 investment (−55,000 at year zero) and cash inflows of $20,000 per year for years 1 through 4, using a 4% discount rate is:

• A) =NPV(0.04,−55000,20000,20000,20000,20000)
• B) =NPV(−55000,20000,20000,20000,20000,0.04)
• C) =NPV(0.04, 55000,−20000,−20000,−20000,−20000)
• D) =NPV(55000,−20000,−20000,−20000,−20000,0.04)

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Definitions:

Unstructured Interview

An interviewing technique without a set sequence of questions, allowing for a more flexible and spontaneous conversation to elicit more personal and detailed responses.

Leniency Error

A bias in performance appraisals where the appraiser tends to rate employees more favorably than their performance justifies.

Structured Interview

An interview process that asks the same job-relevant questions of all applicants, each of whom is rated on established scales.

Casual Conversation

Informal, unstructured dialogue often about everyday topics, where there is no specific purpose other than social interaction.