Net Present Value

question 132

Multiple Choice

Net present value:

• A) is gross domestic product less depreciation.
• B) is sales volume less sales and excise taxes.
• C) is profit after taxes.
• D) ignores the time value of money.
• E) is the discounted value of a series of future cash receipts.

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Definitions:

Note Duration

The term or length of time until a promissory note, bond, or other financial instrument reaches its maturity date.

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of assets, typically expressed on an annual basis.

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or stock certificate, representing its legal value.

Promissory Note

A financial document in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms.