Question 61
2 pts
What is the present value of $1,000,000 to be received in 20 years assuming an annual interest rate
of 5%, compounded monthly?
? $401,877
? $4,000,000
? $2,653,297
? $368,644
Question 62
2 pts
Carlo buys a machine for his business. The machine costs $150,000. Carlo estimates that the
machine will generate a $40,000 cash inflow per year for the next five years. Carlo's cost of capital is
10 percent. What is the Net Present Value (NPV) and Internal Rate of Return (IRR) for Carlo's
investment?
? NPV: $1,631.47 IRR: 10.43%
? NPV: $3,631.47 IRR: 11.59%
? NPV: $9,708.40 IRR: 10.43%
? NPV: -$1,631.47 IRR: -14.28%