Practice Quiz

FSOT: 500 Test Prep Study Questions - Question List

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216. Internal rate of return (IRR) is the interest rate that makes the net present value of all cash flows for a project equal to
  1. -1
  2. 0
  3. 1
  4. 2
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217. Which of the following projects has the highest net present value? (Assume the interest rate per year is 10 percent.)
  1. $1,000 invested today results in cash inflow next year of $2,100
  2. $1,000 invested today results in cash inflow next year of $2,200
  3. $1,500 invested today results in cash inflow next year of $2,600
  4. $1,500 invested today results in cash inflow next year of $2,700
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218.

Consider the following formula for annual compound interest: F = P(1+I)N

F = Future Value
P = Principal
I = Interest rate
N = Number of Years

Which scenario would represent the largest return?

1. Invest $100 for 5 years at 6%
2. Invest $200 for 4 years at 5%
3. Invest $300 for 2 years at 5%
4. Invest $400 for 4 years at 2%

  1. 1
  2. 2
  3. 3
  4. 4
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219. If you were presented with the following set of numbers representing employee hourly rates, which answer choice would provide the mean, median, and mode of those rates in consecutive order?

10.50, 12.00, 15.00, 12.00, 13.75, 22.00, 13.50
  1. 14.11, 13.50, 12.00
  2. 12.00, 13.00, 13.50
  3. 14.11, 13.50, 22.00
  4. 13.75, 12.00, 14.50
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220. Extrapolation is a process that is reasonably reliable for short term use in:
  1. creating an equation using only known variables
  2. calculating the sum of a series of both positive and negative variables
  3. solving an equation that can have multiple outcomes based on variables
  4. estimating the value of a variable at an unobserved time or circumstance
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