Which of the following statements is INCORRECT? A) In general, money today is worth more than money in one year. B) We define the risk-free interest rate, rf for a given period as the interest rate at which money can be borrowed or lent without risk over that period. C) We refer to (1 - rf) as the interest rate factor for risk-free cash flows. D) For most financial decisions, costs and benefits occur at different points in time.

Suppose you have $1000 today and the risk-free rate of interest (rf) is 3.5%. The equivalent value in one year is closest to: A) $965.00 today. B) $966.18 today. C) $1000.00 today. D) $1035.00 today.

When we express the value of a cash flow or series of cash flows in terms of dollars today, we call it the ________ of the investment. If we express it in terms of dollars in the future, we call it the ________. A) present value; future value B) future value; present value C) ordinary annuity; annuity due D) discount factor; discount rate