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

question 41

Multiple Choice

The NPV (net present value) of a cash stream that is equal to $100 per period for 5 periods with a rate of return of 10% (.10) per period would be

• A) 379.08.
• B) 416.98.
• C) 500.00.
• D) 610.51.
• E) 671.56.

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Definitions:

Financial Investment

The purchase of a financial asset (such as a stock, bond, or mutual fund) or real asset (such as a house, land, or factories) in the expectation of financial gain.

Bank Certificate

A document issued by a bank certifying the deposit of money or financial instruments with a certain value.

Budget

An estimate of income and expenditure for a set period of time.

Exhausts

Refers to resources or supplies being completely used up or depleted.