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FSOT: 500 Test Prep Study Questions

Category - Mathematics & Statistics

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Capital budgeting usually involves discounting future cash flows to the current period. If the interest rate is 10 percent per year, what is the current value of a project with $1,000 investment today and $2,200 cash inflow the following year?

$1,000
$1,020
$2,000
$2,020

Explanation

Answer: A - $1,000

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