Multiple Choice
John Doe wins the lottery and may pick from the following three choices: Take $750 000 now. Take $1 000 000 ten years from now.
Take $90 000 at the end of this year, and at the end of each following year for ten instalments
In total.
Assume that John Doe uses a discount rate of 5% to evaluate his choices. If he selects the first option, how much is the present value of that alternative?
A) $450 000
B) $798 000
C) $750 000
D) $1 000 000
Correct Answer:
Verified
Correct Answer:
Verified
Q5: Most capital budgeting methods focus on cash
Q9: Which of the following BEST describes the
Q13: Which of the following is a common
Q18: Which of the following methods ignores the
Q49: The accounting rate of return calculations ignores
Q84: If an investment project's IRR is higher
Q94: The payback method can only be used
Q110: Using the NPV method of evaluating investments,
Q117: The accounting rate of return method and
Q120: All else being equal, investments with longer