The interest rate that home buyers pay on the loans they take to finance their homes is known as

1. Mortgage Rate
2. Real Rate
3. Nominal Rate
4. None of these
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Answer: A
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Borrow from a source if the internal rate of return of the loan is ___________ than the opportunity cost of capital.

1. Less
2. More
3. Equal
4. None of these
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Answer: A
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The discount rate that makes the present value of the future cash inflows equal to present value of cash value is named as

1. Effective Annual Rate
2. Market Capitalization Rate
3. Internal rate of return
4. None of these
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Answer: C
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The difference between the present value of all future cash inflows minus the present value of all current and future cash outflows in called

1. Net Present Value
2. Future value
3. Market Capitalization Rate
4. Discounting
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Answer: A
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To distinguish the two kinds of discounting in the world of business, the calculation of present values is called

1. Discounted Cash Flow
2. Net Present Value
3. Discount rate
4. None of these
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Answer: A
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Interest rates on loans and saving accounts are usually stated in the form of a ______________ with a certain frequency of compounding

1. Expected value
2. Effective Annual rate
3. Annual Percentage rate
4. None of these
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Answer: C
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There is a handy rule of thumb that can help to estimate future values when there is no availability of calculator or table is known as

1. Internal Rate of Return
2. External Rate of Return
3. Future Value factor
4. Rule of 72
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Answer: D
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To avoid the difficulties caused by illiquidity, firms need to forecast their cash outflows and inflows carefully. A plan that shows these forecasts is termed as a

1. Cash Cycle Time
2. Cash Budget
3. Liquidity
4. None of these
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Answer: B
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The proportion of the net income not paid out in dividends or used to repurchase outstanding shares of the stock is called

1. Growth Rate of Shareholder’s Equity
2. Sustainable Growth Rate
3. Earning Retention Rate
4. None of these
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Answer: A
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Revaluing and reporting a firm’s assets and liabilities at their current market prices is known as

1. Return on Book Equity
2. Book Value
3. Marking to Market
4. Good Will
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Answer: C
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