Section A

QUESTION 1 MARKS: 10

Multiple choice

1. What is the name of the amount of funds to which interest is paid?

a) The principal

b) The annuity

c) The Compound

d) Cash flow

2. Which of the following statement is not correct?

a) Time value for money is the concept states that an amount of money today is worth more that it will be at some point in future.

b) Inflation refers to a continuous rise in the general level of prices of goods and services.

c) Time value of money is the same as the decrease in purchasing power of as result of inflation.

d) Discounting calculations involve the calculation of present values.

3. A teacher invests some and for 1 year and expects to receive N$ 1 000 at interest rate of 16%. Calculate the amount the teacher must invest today.

a) N$ 1160

b) N$ 840

c) N$ 862.07

d) N$ 826.07

4. Which of the following is not a discounted cash flow technique?

a) Net present value (NPV)

b) Profitability Index

c) Internal rate of return

d) Payback period

5. Which of the following cannot be referred to as the rate used for discounting cash flows:

a) Net present value

b) Discount rate

c) Opportunity cost

d) Cost of capital