Quiz: Net Present Value and Discounted Cash Flow
AQA A-Level Business (7132)
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Building on what you've learned, let's test your knowledge of Net Present Value and Discounted Cash Flow!
What does Net Present Value (NPV) measure?
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Which of the following are true about discounted cash flow? (Select all that apply)
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The {{blank0}} rate is used to discount future cash flows back to their {{blank1}} value.
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Match the items on the left with their correct pairs on the right
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Calculate the NPV if an investment costs £5,000 and the discounted cash flows over 3 years are £2,000, £2,500, and £3,000. (Assume no additional discount rate adjustment.)
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Why is the time value of money important in investment appraisal?
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Which of the following are advantages of NPV as an investment appraisal method? (Select all that apply)
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If NPV is {{blank0}}, the investment is considered profitable. If NPV is {{blank1}}, the investment is not profitable.
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Match the items on the left with their correct pairs on the right
Which factor most directly affects the discount rate used in NPV calculation?
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