Answer to Question #265666 in Microeconomics for gikovi

Question

Q1. An effective interest rate is

(i) Market interest rate 

(ii) Expected change in interest rate

(iii) Nominal interest rate defaulted by inflation

(iv) None of these

 

Q2. Annual equivalent worth is

(i) Annual equivalent cost

(ii) Annual equivalent amount

(iii) Net of annual equivalent worth of investment and annual equivalent worth of revenue

(iv) None of these

 

Q3. Internal rate of return is

(i) the nominal interest rate

(ii) the interest rate at which present worth > 0

(iii) the interest rate at which present worth < 0

(iv) the interest rate at which present worth = 0

 

Q4. A mutually exclusive investment proposal means

(i) A set of equal return proposal

(ii) A set of equal principal investment proposal

(iii) A set of equal life proposal

(iv) None of these

 

Q5. Present worth of an investment proposal means

(i) Principal investment

(ii) Annual return

(iii) Net of present worth of investment and present worth of return

(iv) Nominal interest rate

Answer 1

Solution:

Q1.). The correct answer is (i.). Market interest rate.

Q2.). The correct answer is (i) Annual equivalent cost.

Q3.). The correct answer is (iv) the interest rate at which present worth = 0

Q4.). The correct answer is (ii) A set of equal principal investment proposal.

Q5.). The correct answer is (iii) Net of present worth of investment and present worth of return.