Multiple choice

1.  Present value of $121,000 expected to be received one year from today at an interest rate 

(discount rate) of 10% per year is:  

a. $121,000 

b. $100,000 

c. $110,000 

d. None of the above 

2.  One year discount factor at a discount rate of 25% per year is:  

a. 1.25 

b. 1.0 

c. 0.8 

d. None of the above 

3.  The one-year discount factor at an interest rate of 100% per year is:  

a. 1.5 

b. 0.5 

c. 0.25 

d. None of the above 

4.  Present Value of $100,000 that is, expected, to be received at the end of one year at a discount rate of 25% per year is:  

a. $80,000 

b. $125,000 

c. $100,000 

d. None of the above