3. Finance and Accounts

Net Present Value — Quiz

Test your understanding of net present value with 5 practice questions.

Read the lesson first

Practice Questions

Question 1

What does Net Present Value, $NPV$, measure in investment appraisal?

Question 2

Which discounting idea is essential to calculating $NPV$?

Question 3

A business invests $100$ today and expects to receive $60$ after one year. If the discount rate is $10\%$, what is the present value of the $60$ receipt?

Question 4

Using the same figures, what is the $NPV$ of the investment?

Question 5

What is the normal decision rule for $NPV$?