D076 Exam Questions & Answers Scored A
What is another name for the cost of capital? - ANSWER-Discount rate What is the name for the minimum rate of return that an investor or lender will accept for investments? - ANSWER-Required rate of return The nominal interest rate of an investment is 8%, and the inflation rate is 3%. What is the real interest rate? - ANSWER-5% (Real Rate = Nominal Rate - Inflation, so 8% - 3% = 5%) Which action reduces the future value of cash flows? - ANSWER-Receive all cash flows later than expected. (The later the cash flows are received, the lower the future value is.)
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