The net present value of $1,000 received one year from now will
a. increase with the interest rate.
b. exceed $1,000 as long as the interest rate is positive.
c. exceed the net present value of $1,000 to be received two years from now.
d. equal $1,100 if the current interest (discount) rate is 10 percent.
C
You might also like to view...
What is meant by the term "marginal analysis"? Suppose an individual has to choose between renting four apartments at different distances from his place of work
The individual has to commute to work on five days of the week and as such will require different quantities of gasoline depending on the apartment he decides to rent. The monthly rents and expected gasoline consumption from each of the apartments is shown in the table below. If the price of gasoline is $5 per gallon, using marginal analysis, determine the optimum choice for the individual. Which principal is used for this optimization? What does it state? Apartment Gasoline Consumption (gallons per month) Rent ($ per month) 1 5 1,100 2 10 1,000 3 15 960 4 20 940
How will an increase in the expected future exchange rate affect the current supply and demand curves for dollars?
What will be an ideal response?