Lower the value of interest rates

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Question one: State whether the following statements are true or false and justify the false.

A) The lower the value of interest rates, the more the present value of money is expected to be. (T/F)

B) The discounted payback period is more effective than the Net Present Value as measure of performance in determining the best project to invest in. (T/F)

C) John works in a family business and he is paid a percentage of yearly profits. He is given the option of receiving LE 25,000 at the end of the year or LE12,500 every 6 months. He chooses the second option because he believes that he will better off this way. (T/F) no calculations required!

D) When a firm's internal rate of return is more than its weighted average cost of capital then the firm is at risk of bankruptcy. (T/F)

E) An annuity due is always higher in amount than an ordinary annuity, whether present value or future value. (T/F)

Reference no: EM132613341

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