The effect of purchasing power or inflation on present value is important because _________?

Related Mcqs:

1. A discount rate which is equal to the present value of TV to the project cost present value is classified as _________?

   A. negative internal rate of return
   B. modified internal rate of return
   C. existed internal rate of return
   D. relative rate of return

2. An inflation rate includes in bond’s interest rates is one which is inflation rate________?

   A. At bond issuance
   B. Expected in future
   C. Expected at time of maturity
   D. Expected at deferred call

3. An inflation free rate of return and inflation premium is two components of_________?

   A. Quoted rate
   B. Unquoted rate
   C. Steeper rate
   D. Portfolio rate

4. The relationship between Economic Value Added (EVA) and the Net Present Value (NPV) is considered as _________?

   A. valued relationship
   B. economic relationship
   C. direct relationship
   D. inverse relationship

5. Relationship between Economic Value Added (EVA) and Net Present Value (NPV) is considered as____________?

   A. Valued relationship
   B. Economic relationship
   C. Direct relationship
   D. Inverse relationship

6. Process of calculating future value of money from present value is classified as____________?

   A. Compounding
   B. Discounting
   C. Money value
   D. Stock value

7. An increase in value of option leads to low present value of exercise cost only if it has____________?

   A. Low volatility
   B. Interest rates are high
   C. Interest rates are low
   D. High volatility

8. The coupon rate on Treasury Inflation Protection Securities is determined by _________?

   A. discount buying
   B. premium selling
   C. auction process
   D. direct selling

9. A project whose cash flows are more than the capital invested for rate of return then the net present value will be _________?

   A. positive
   B. independent
   C. negative
   D. zero

10. The initial cost is $5000 and the probability index is 3.2 then the present value of cash flows is _________?

    A. 8200
    B. 16000
    C. 0.0064
    D. 1562.5