If 5,000 is borrowed at 9 percent to be paid back over one year, ...

[luvbio]

If 5,000 is borrowed at 9 percent to be paid back over one year, the interest on the loan is ________.
 
  A) 450
  B) 590
  C) 500
  D) 490
  E) None of the above

Question 2

Given the following stream of cash flows assuming a current discount rate of 10 percent, what is the net present value of the project?
 
  Year Cash Inflow
  1  500,000
  2  750,000
  3 1,000,000
 
  a. 1,000,000
  b. 1,825,695
  c. 2,137,980
  d. 2,250,000

[covalentbond]

Answer to Question 1

A

Answer to Question 2

b