Q1
The CRF (ep) is also known as: [CRF(EP) - 8% - 7], where
A.
8% is the rate of interest per year
B.
Money is borrowed for n = 7 years
C.
Both (A) and (B)
AnswerD.
Neither (A) nor (B)
Answer: Option C
Solution
Answer: Option C
Solution:
CRF(ep) stands for Capital Recovery Factor (equal payment).CRF(EP) - 8% - 7 means that we are trying to find a factor to convert a present value into a series of equal payments.
8% is the interest rate used for the calculation. So, Option A is correct.
7 is the number of years (or periods) over which the payments will be made. So, Option B is also correct.
Since both Option A and Option B are correct, the answer is Both (A) and (B).