Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN: 9781337395083

Author: Eugene F. Brigham, Phillip R. Daves

Publisher: Cengage Learning

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,Match the following terms with the appropriate definition.

Effective yield or interest rate

Monetary liability

Compound interest

Present Value

Future value of a single amount

A.

Fixed obligation to pay an amount in cash.

B.

The rate at which money will actually grow.

C.

Interest accumulates on interest.

D.

Current worth of future cash flows.

E.

The money to which an amount invested will grow over time.

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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions

The expected period of time that will elapse between the date of a capital investment and thecomplete recovery of the amount of cash investedis called: A.The average rate of return period B.The cash payback period C.The net present value period D.The internal rate of return period

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This calculation determines profitability or growth potential of an investment, expressed as a percentage, at the point where NPV equals zero A. internal race of return (IRR) method B. net present value (NPV) C. discounted cash flow model D. future value method

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The IRR method assumes that cash flows are reinvested at _________. A. the internal rate of return B. the companys discount rate C. the lower of the companys discount rate or Internal rate of return D. an average of the internal rate of return and the discount rate

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The NPV method assumes that cash inflows associated with a particular investment occur when? A. only at the time of the initial Investment B. only at the end of the year C. only at the beginning of the year D. at any of these times

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How does one determine the value of any asset whose value is based on expected future cash flows?

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Examine key Characteristics of Term or Maturity structure of Interest Rates and Yield Curves.
Evaluate the basic concepts of Time Value for Money

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Which of the following is the correct definition for present value (PV)?
Select one:
a.
The current value of the sum of all the past cash flows given a specified rate of return.
b.
The current value of the sum of all the future profits made by the company with a specified rate of return.
c.
The current value of a future sum of money or stream of cash flows given a specified rate of return.
d.
The future value of the sum of all the future cash flows without a specified rate of return.

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Under IFRS, value-in-use is defined as:
a. net realizable value.
b. fair value.
c. future cash flows discounted to present value.
d. total future undiscounted cash flows.

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CREATE AN EXAMPLE PROBLEM WITH CASHFLOW
a.) nominal compound interest
b.) continuous compound interest

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Which of the following methods consider the time value of money?
A. payback and accounting rate of return
B. payback and internal rate of return
C. internal rate of return and accounting rate of return
D. internal rate of return and net present value

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Assets are priced such that _____________________ increase with the riskiness of future payoffs.
A) expected returns
B) realized returns
C) non-refundable returns
D) regulated returns

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