Quiz Ch 05 – Factors Affecting Present Value
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
Which factor will lead to a decreased present value when considering the future value?
Which factor will lead to a decreased present value when considering the future value?
Assuming all else remains the same, which action will lead to an increase in the present value of an annuity?
How does the frequency of compounding impact financial metrics when other factors are held constant?
What is the effect of compounding interest semi-annually instead of annually?
How can you calculate the per-period interest rate when interest is paid m times per year?
What is the formula to calculate the present value of $1 received in five years given that the five-year discount factor is denoted as “d”?
When considering an annually compounded rate and the annual percentage rate (APR) calculated for loans with monthly payments under truth-in-lending laws, how are these two measures typically related?
True or false: An annuity factor illustrates the future value of a $1 investment made at the present time.
True or false: An annual percentage rate (APR) is calculated by compounding the rate on an annual basis.
True or false: To find the present value of an annuity due, you can multiply the present value of an ordinary annuity by the discount rate.