Ing económica- Advanced NPV Multiple Choice Questions

1. 1. (Literal) What is the future value of $100 invested at 20% for one year?

• A. $120

• B. $100

• C. $140

• D. $144

2. 2. (Literal) What is the formula to calculate present value?

• A. PV = FV × (1 + r)ⁿ

  
  

• B. PV = FV ÷ (1 + r)ⁿ

• C. PV = FV × r

• D. PV = FV + rⁿ

3. 3. (Literal) How many years of benefits does the example project provide?

• A. Two

• B. Three

• C. Four

• D. Five

4. 4. (Literal) What is the value of WACC used in the video example?

• A. 15%

• B. 20%

• C. 25%

• D. 10%

5. 5. (Literal) What is the initial investment required for the project in the example?

• A. $400

• B. $333

• C. $1000

• D. $1200

6. 6. (Literal) Why is the present value of future cash flows lower than their nominal value?

• A. Due to inflation

• B. Because future money is worth more

  
  

• C. Because of the time value of money

  
  

• D. Because of taxes

7. 7. (Literal) What conclusion can be drawn if NPV is negative?

• A. The project is neutral

• B. The project adds value

  
  

• C.The project should not be accepted

  
  

• D. The project should continue

  
  

8.8 (Literal) Which of the following best describes WACC?

• A. The tax rate of the firm

• B. The average market rate

• C. A weighted rate of return from all capital sources

• D. The return from equity only

  
  

9. 9. (Literal) What is the main idea behind the NPV method?

• A. To ignore time and focus on total money

• B. To compare nominal values

• C. To translate future values into today’s money

• D. To calculate interest earnings

10. 10. (Literal) If a project has an NPV of $0, what can be inferred?

• A. It is risky

• B. It is neither profitable nor unprofitable

  
  

• C. It should be accepted

• D. It always fails