Use the following timeline to answer the question(s) below. 0 1 2 3 $600 $1,200
ID: 2667932 • Letter: U
Question
Use the following timeline to answer the question(s) below.0 1 2 3
$600 $1,200 $1,800
4) At an annual interest rate of 7%, the future value of this timeline in year 3 is closest to:
A) $3,600
B) $4,035
C) $3,770
D) $3,295
5) At an annual interest rate of 7%, the present value of this timeline in year 0 is closest to:
A) $3,600
B) $3,770
C) $3,080
D) $4,035
6) At an annual interest rate of 7%, the future value of this timeline in year 2 is closest to:
A) $4,035
B) $3,080
C) $3,525
D) $3,770
Use the following information to answer the question(s) below.
Nielson Motors is considering an opportunity that requires an investment of $1,000,000 today and will provide $250,000 one year from now, $450,000 two years from now, and $650,000 three years from now.
7) If the appropriate interest rate is 10%, then the NPV of this opportunity is closest to:
A) $300,000
B) $1,300,000
C) $88,000
D) ($88,000)
Explanation / Answer
0 1 2 3
$600 $1,200 $1,800
4) At an annual interest rate of 7%, the future value of this timeline in year 3 is closest to:
A) $3,600
B) $4,035
C) $3,770
D) $3,295
5) At an annual interest rate of 7%, the present value of this timeline in year 0 is closest to:
A) $3,600
B) $3,770
C) $3,080
D) $4,035
6) At an annual interest rate of 7%, the future value of this timeline in year 2 is closest to:
A) $4,035
B) $3,080
C) $3,525
D) $3,770
Use the following information to answer the question(s) below.
Nielson Motors is considering an opportunity that requires an investment of $1,000,000 today and will provide $250,000 one year from now, $450,000 two years from now, and $650,000 three years from now.
7) If the appropriate interest rate is 10%, then the NPV of this opportunity is closest to:
A) $300,000
B) $1,300,000
C) $88,000
D) ($88,000)
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