An Important Element in Estimating the Present Value of an Investment

question 15

Multiple Choice

An important element in estimating the present value of an investment is the calculation of the discount factor.The discount factor may be expressed as _______ where r is the discount rate and n is the number of years the investment is held.

• A)(1 + r)ⁿ
• B)(1 + n)^r
• C)1/(1 + r)ⁿ
• D)1/(1 + n)^r

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Definitions:

Pepsinogens

Precursor enzymes produced by the stomach that, when activated, play a key role in breaking down proteins during digestion.

Zymogens

Inactive enzyme precursors that require a biochemical change to become active enzymes.

Estrogens

A group of steroid hormones that play a key role in the development and regulation of the female reproductive system and secondary sexual characteristics.

Androgens

A group of hormones that play a role in male traits and reproductive activity; testosterone is the most well-known androgen.