1. A $25 investment returns $27.50 at the end of one year with no risk. Given this, you know that the NPV:
is zero at any given discount rate.
is negative if the required return is less than 10 percent.
equals 1.0 if the required return is 10 percent.
is zero if the required return is equal to 10 percent.
must be positive at any given discount rate.
2. Lucas invested $4,500 at 6.2 percent, compounded continuously. What will his investment be worth after 15 years?
$15,557.78
$9,240.03
$11,405.29
$12,308.84
$8,685.00