Posted by **Dina** on Sunday, April 11, 2010 at 2:58pm.

Multiple choice

1. If the friend offers to pay you $1 five years from today, the net present value will:

A)be higher than $1.

B)depend upon the interest rate offered.

C)be equal to zero since you don't have the dollar.

D)not be important in understanding the time value of money.

2.William installs custom sound systems in cars. If he installs seven systems per day, his total costs are $300. If he installs eight systems per day, his total costs are $400. William will install only eight sound systems per day if the eighth customer is willing to pay at least:

A) $300.

B) $400.

C) $100.

D) $50.