The NPV (Net Present Value) of a Cash Stream That

question 30

Multiple Choice

The NPV (net present value) of a cash stream that is equal to $75 per period for 5 periods with a rate of return of 15% per period would be

• A) $261.37.
• B) $289.12.
• C) $312.74.
• D) $322.44.

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Definitions:

Federal Government

The national government of a federal country, such as the United States, which shares power with state and local governments.

Boston Tea Party

A political protest by the American colonists against Great Britain in 1773, where they destroyed an entire shipment of tea sent by the East India Company in defiance of British tea taxes.

Marginal Tax Rate

The marginal tax rate is the rate at which the last dollar of a taxpayer's income is taxed, indicating the rate of tax that applies to each additional dollar of taxable income.

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases.