Net Present Value Can Be Calculated for Any Time Period

question 59

Multiple Choice

Net Present Value can be calculated for any time period provided that

• A) both the interest rate and the time period correspond to the period being examined.
• B) the interest rate is stipulated as an annual percentage but the time period corresponds to the period being examined.
• C) the time period is stipulated as an annual period but the interest rate corresponds to the period being examined.
• D) a spreadsheet is used for the calculation since this cannot be computed on a financial calculator.

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Definitions:

Direct Tax

A type of tax levied directly on personal or corporate income.

GDP

The entire financial value of all conclusive goods and services brought forth within a nation over an established duration is encapsulated by Gross Domestic Product.

Consumption Sector

The part of the economy that involves the purchase and use of goods and services by households.

Social Security

A government program that provides financial support to people who are retired, disabled, or survivors of deceased workers.