What refers to the interest rate at which the present work of the cash flow on a project is zero of the interest earned by an investment ?

Related Mcqs:

1. A feasibility study shows that a fixed capital investment of P10,000,000 is required for a proposed construction firm and an estimated working capital of P2,000,000. Annual depreciation is estimated to be10% of the fixed capital investment. Determine the rate of return on the total investment if the annual profit is P3,500,000?

   A. 28.33 %
   B. 29.17 %
   C. 30.12 %
   D. 30.78 %

2. Engr. Trinidad loans from a loan firm an amount of P100,000 with a rate of simple interest of 20% but the interest was deducted from the loan at the time the money was borrowed. If at the end of one year, she has to pay the full amount of P100,000, what is the actual rate of interest ?

   A. 23.5 %
   B. 24.7 %
   C. 25.0 %
   D. 25.8 %

3. A person buys a piece of lot for P 100,000 downpayment and 10 deferred semi-annual payments of P 8,000 each, starting three years from now. What is the present value of the investment if the rate of interest is 12% compounded semi-annually ?

   A. P 142,999.08
   B. P 143,104.89
   C. P 142,189.67
   D. P 143,999.08

4. A investor wishes to earn 7% on his capital after payment of taxes. If the income from an available investment will be taxed at an average rate of 42%, what minimum rate of return, before payment of taxes, must the investment offer to be justified ?

   A. 12.07 %
   B. 12.34 %
   C. 12.67 %
   D. 12.87 %

5. What rate of interest compounded annually is the same as the rate of interest of 8% compounded quarterly ?

   A. 8.07 %
   B. 8.12 %
   C. 8.16 %
   D. 8.24 %

6. What refers to the cost of borrowing money or the amount earned by a unit principal per unit time ?

   A. Yield rate
   B. Rate of return
   C. Rate of interest
   D. Economic return

7. In year zero, you invest P 10,000.00 in a 15% security for 5 years. During that time, the average annual inflation is 6%. How much in terms of year zero pesos will be in the account at maturity ?

   A. P 15,030.03
   B. P 20,113.57
   C. P 18,289.05
   D. P 16,892.34

8. A P 1,000,000 issue of 3%, 15-year bond was sold at 95%. What is the rate of interest of this investment ?

   A. 3.0%
   B. 3.4%
   C. 3.7%
   D. 4.0%

9. The true value of interest rate computed by equations for compound interest for a 1 year period is known as __________________?

   A. Expected return
   B. Nominal interest
   C. Effective interest
   D. Economic return

10. The exact simple interest of P5,000 invested from June 21, 1995 to December 25, 1995 is P100. What is the rate of interest ?

    A. 3.90 %
    B. 3.92 %
    C. 3.95 %
    D. 3.98 %