Problem 1: The amount of money that would have to be invested today at a given interest rate over a specified period in order to equal a future amount is called
1. present value interest factor.
2. future value.
3. present value.
4. future value interest factor.
Problem 2: As the interest rate increases for any given period, the future value interest factor will
1. increase.
2. move toward 1.
3. remain unchanged.
4. decrease.
Problem 3: If the present value of a perpetual income stream is increasing, the discount rate must be
1. changing unpredictably.
2. decreasing.
3. increasing proportionally.
4. increasing.
Problem 4: The annual rate of return is variously referred to as the
1. all of these.
2. cost of capital.
3. opportunity cost.
4. discount rate.