From a market point of view, Universal Pictures film studio might see its competition as ________

Which of the following statements about the net present value is true?

A) It has an inadequate reinvestment assumption. B) It may be used to select among projects of different sizes. C) It produces a percentage result that is easy to describe. D) It is likely that there will be more than one NPV for a project.

Someone has offered you the opportunity to purchase an IOU. The IOU will pay back a total of $500 in three years. How much would you be willing to pay for that IOU today if you want to earn an annual rate of return of 16%?

A) $320.33 B) $422.63 C) $292.63 D) $380.45