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Brealey Principles of Corporate Finance 10e

# Brealey Principles of Corporate Finance 10e

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10/09/2014

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Chapter 02 - How to Calculate Present Values
Chapter 02How to Calculate Present Values

Multiple Choice Questions

1. The present value of \$100 expected in two years fro today at a discount rate of !" is# . \$11!.!%&. \$10'.00C. \$100.00(. \$').00

2. Present Value is defined as# . *uture cash flows discounted to the present at an appropriate discount rate&. +nverse of future cash flowsC. Present cash flow copounded into the future(. ,one of the aove

. +f the interest rate is 12"/ what is the 2-year discount factor . 0.)2&. 0.')2)C. 1.2%%(. ,one of the aove

%. +f the present value of the cash flow 3 is \$2%0/ and the present value cash flow 4 \$1!0/ then the present value of the coined cash flow is# . \$2%0&. \$1!0C. \$'0(. \$%00

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Chapter 02 - How to Calculate Present Values
. The rate of return is also called# +5 discount rate6 ++5 hurdle rate6 +++5 opportunity cost of capital . + only&. + and ++ onlyC. +/ ++/ and +++(. ,one of the 7iven ones

!. Present value of \$121/000 expected to e received one year fro today at an interest rate 8discount rate5 of 10" per year is# . \$121/000&. \$100/000C. \$110/000(. ,one of the aove

. 9ne year discount factor at a discount rate of 2" per year is# . 1.2&. 1.0C. 0.'(. ,one of the aove

'. The one-year discount factor at an interest rate of 100" per year is# . 1.&. 0.C. 0.2(. ,one of the aove

). Present Value of \$100/000 that is/ expected/ to e received at the end of one year at a discount rate of 2" per year is# . \$'0/000&. \$12/000C. \$100/000(. ,one of the aove

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Chapter 02 - How to Calculate Present Values
10. +f the one-year discount factor is 0.'/ what is the discount rate 8interest rate5 per year . 10"&. 20"C. 0"(. ,one of the aove

11. +f the present value of \$%'0 to e paid at the end of one year is \$%00/ what is the one-year discount factor . 0.'&. 1.20C. 0.20(. ,one of the aove

12. +f the present value of \$20 expected to e received one year fro today is \$200/ what is the discount rate . 10"&. 20"C. 2"(. ,one of the aove

1. +f the one-year discount factor is 0.)0/ what is the present value of \$120 to e received one year fro today . \$100&. \$)!C. \$10'(. ,one of the aove

1%. +f the present value of \$!00 expected to e received one year fro today is \$%00/ what is the one-year discount rate . 1"&. 20"C. 2"(. 0"

2-