23.5.A - Investment Decisions
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Practice Questions
Test your understanding with targeted questions
What does NPV stand for?
💡 Hint: Think about the value of cash flows.
Define Payback Period.
💡 Hint: It's related to how quickly you get your money back.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does NPV help determine?
💡 Hint: Recall its role in financial assessments.
True or False: The Payback Period considers the time value of money.
💡 Hint: Consider what the term suggests.
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Challenge Problems
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Evaluate an investment that requires a $5,000 upfront cost, provides a return of $1,500 each year for 4 years, and has a discount rate of 8%. What is the NPV?
💡 Hint: Break down the calculation step-by-step for clarity.
Consider two investments; Investment A offers a steady return of 10% but comes with higher risk, while Investment B offers a return of 6% with minimal risk. Explain which you would choose and why.
💡 Hint: Reflect on personal investment goals.
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