1. The interest rate used to calculate the present value today of an amount expected

at a future point in time may be labelled as each of the following EXCEPT

1. opportunity cost.

2. inflation rate.

3. required return.

4. cost of capital.

2. With a perpetuity, the periodic cash flow stream continues

1. only one year.

2. only 10 years.

3. only 30 years.

4. forever (i.e., indefinitely).

3. The contractual interest rate specified in a loan agreement between a lender

and a borrower is the

1. nominal annual rate.

2. effective annual rate (EAR).

3. Weighted Average Cost of Capital (WACC).

4. inflation rate.

4. A loan amortization schedule breaks the loan payment into its two components,

which are

1. Sales; Net Income.

2. Assets; Liabilities.

3. Operations; Financing.

4. Principal; Interest.