MCQ: SHADE answer in MCQ sheet on page 11. Which is better, $1 NOW or $1 a year from now?a. Nowb. 1 year laterC. Same value2. When borrowing money for a project, the lower the risk the higher the interest ratea. Trueb. False3. Calculate the missing value:Interest ($)Principal($)1,500RateTime (months)2.5°%7 monthsa) $21.88b) $39.96c) $33.25d) 20.254.Calculate the missing value:Principal($)RateTime (months) Interest($)10.25 o1l months328.85a) $5,000b) $3,499.96c) $4,533.25d) None of these25ASUSf8D/点)prt scdeletrinsert,f7f10f11f12

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Answered: 1. Which is better, $1 NOW or $1 a year…

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1. Which is better, $1 NOW or $1 a year from now? a. Now b. 1 year later C. Same value

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

MCQ: SHADE answer in MCQ sheet on page 1
1. Which is better, $1 NOW or $1 a year from now?
a. Now
b. 1 year later
C. Same value
2. When borrowing money for a project, the lower the risk the higher the interest rate
a. True
b. False
3. Calculate the missing value:
Interest ($)
Principal($)
1,500
Rate
Time (months)
2.5°%
7 months
a) $21.88
b) $39.96
c) $33.25
d) 20.25
4.
Calculate the missing value:
Principal($)
Rate
Time (months) Interest($)
10.25 o
1l months
328.85
a) $5,000
b) $3,499.96
c) $4,533.25
d) None of these
25
ASUS
f8D/点)
prt sc
deletr
insert,
f7
f10
f11
f12

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