Suppose That the Present Discounted Value of a Stream of Payments

question 78

Multiple Choice

Suppose that the present discounted value of a stream of payments is $1,000. If the yearly payment is $50, what is the interest rate?

• A) 50%
• B) 20%
• C) 5%
• D) 0.5%

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Definitions:

Capacity Constraints

Limitations related to the maximum level of output or activity that can be achieved due to existing resources.

SRMR

Standardized Root Mean Square Residual, a goodness-of-fit statistic in structural equation modeling that measures the difference between observed and predicted correlations.

SRMC

Short-Run Marginal Cost, which refers to the cost of producing one more unit of a good or service in the short term.

Acquired Firm

A company that has been purchased and taken over by another company.