If the annual interest rate is 0%,the net present value of receiving $550 in the next year is
A)$550
B)$551
C)$549
D)$500

Question

​If the annual interest rate is 0%,the net present value of receiving $550 in the next year is
A)​$550
B)$551
C)$549
D)​$500

Quizplus · Accepted Answer

When the annual interest rate is 0%, the present value of receiving $550 in the next year is simply $550. This is because there is no discounting of future cash flows in the absence of an interest rate. Therefore, the net present value (NPV) of receiving $550 is also $550. None of the other options are correct as they do not reflect the actual NPV in this scenario.

​If the Annual Interest Rate Is 0%,the Net Present Value

If the Annual Interest Rate Is 0%,the Net Present Value