A regular annuity is a fixed amount of money received at the beginning of each compounding period. True False A perpetuity is an annuity that yields the same cash flow forever. True False Multiple Choice Questions The hurdle rate is: the market value of a cash-flowing asset. the interest utilized in lump sum calculations. the interest rate of a loan. an investor's ROI target. What is the approximate present value of $100 to be received at the end of 5 years assuming a 20% discount rate? $10 $30 $40 $50 What is the approximate future value of $200 invested at an annual interest rate of 5% for 20 years? $500 $510 $530 $540 What is the approximate future value of $1,000 to be received each year for 15 years assuming an interest rate of 10%? $30.562 $32.762 $34.562 $31, 772 The riskier the investment: the higher the asset's present value. the higher the asset's market value. the lower the asset's present value. the lower the asset's ROI. Completion Statements The mix of used to finance the asset determines the weighted average cost of capital. value is the current value of a cash-flowing asset based on the amount and timing of its projected cash flows. value is the value of a cash-flowing asset some time in the future, assuming a compounded rate of interest. An is a fixed amount of money received or paid each compounding period for a set period. The formula for a is PMT/r where PMT stands for annuity payment and r is the interest rate