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Submitted By p1500697
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The future value of an investment will increase when 

| | |the number of years increases. |
| | |the interest rate increases. |
| | |both a and b. |
| | |none of above. |

Question 2
When the compounding frequency increases (interest is paid more often), the future value of the investment will 

| | |increase. |
| | |decrease. |
| | |show no change. |
| | |increase or decrease. |

When calculating NPV for two projects of differing risk, a financial manager should 

| | |use the company’s overall discount rate for both of the projects. |
| | |adjust the overall discount rate higher for the riskier project. |
| | |adjust the overall discount rate lower for the riskier project. |
| | |adjust the overall discount rate higher for the less risky project. |

Question 4
NPV for project A is $2,490 and NPV for project B is $4,880. Management should 

| | |choose both if they are independent projects.

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