Post Utme Mountain Top University 2023 Commerce Question 17

Practice objective / multiple choice question 17 from the 2023 Post Utme Mountain Top University Commerce examination.

Post Utme Mountain Top University 2023 Commerce Objective / Multiple Choice
Question 17 POST_UTME_MOUNTAIN_TOP_UNIVERSITY • 2023 • COMMERCE • objective

A firm is considering two different investment opportunities: a 5-year bond with a 6% annual return and a 10-year bond with a 7% annual return. Using the concept of time value of money, calculate the present value of each investment opportunity.

Answer Options

A. The present value of the 5-year bond is ₦10,000 and the present value of the 10-year bond is ₦20,000.
Correct Answer B. The present value of the 5-year bond is ₦15,000 and the present value of the 10-year bond is ₦30,000.
C. The present value of the 5-year bond is ₦20,000 and the present value of the 10-year bond is ₦40,000.
D. The present value of the 5-year bond is ₦25,000 and the present value of the 10-year bond is ₦50,000.
Correct Answer
B
Correct Option:
The present value of the 5-year bond is ₦15,000 and the present value of the 10-year bond is ₦30,000.

About This Question

This is Post Utme Mountain Top University 2023 Commerce Question 17. It is one of the objective questions from the 2023 Post Utme Mountain Top University Commerce examination.

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