The Net Present Value of $100 to Be Received One

question 28

Multiple Choice

The net present value of $100 to be received one year from now will

• A) increase if the interest rate rises.
• B) increase if the payment is delayed until two years from now.
• C) be greater than the net present value of $95 to be received one year from now.
• D) be greater than the value of having $95 now if the interest rate is 10 percent.

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Definitions:

Ratification

The act of officially approving or confirming an agreement or action, making it valid and binding.

Implied Ratification

The acceptance or approval of a previously unauthorized act by behaving in a manner that acknowledges the act as authorized.

Express Ratification

Formal approval or confirmation of an act or agreement, usually explicitly and often in writing, making it officially valid.

Misrepresentation

The act of giving a false or misleading statement about a material fact, often leading to a breach of contract.