Match the terms to the descriptionTime Value of Money (TVM)DiscountingPresent Value (PV)Future Value (FV)Cash Flow (CF)✓ [Choose ]value of money at some later timefunds in a secure investment will increase to an equivalent future amountthe potential lost benefit when choosing one alternative over anothertransferring money into our out of an accountcalculating the present value of future cash flow streamvalue of money right now[Choose ][Choose ][Choose ]

The time value of money concept explains how money becomes less valuable with the passage of time.…

Match the terms to the description Time Value of Money (TVM) Discounting Present Value (PV) Future Value (FV) ✓ [Choose ] value of money at some later time funds in a secure investment will increa the potential lost benefit when choosin transferring money into our out of an a calculating the present value of future value of money right now [Choose ] [Choose] >

Match the terms to the description Time Value of Money (TVM) Discounting Present Value (PV) Future Value (FV) ✓ [Choose ] value of money at some later time funds in a secure investment will increa the potential lost benefit when choosin transferring money into our out of an a calculating the present value of future value of money right now [Choose ] [Choose] >

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 13MC: Which of the following discounts future cash flows to their present value at the expected rate of...

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When using the NPV method for a particular investment decision, if the present value of all cash Inflows Is greater than the present value of all cash outflows, then _______ . A. the discount rate used was too high B. the investment provides an actual rate of return greater than the discount rate C. the investment provides an actual rate of return equal to the discount rate D. the discount rate is too low
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
Which figure of merit provides an interest rate at which the present value of the future cash flows equals the amount invested? a) NPV b) IRR c) Cap Rate d) DCF Please ensure accuracy and explain your choice
1. Which of the following is not true? Group of answer choices The method in which we calculate a project’s Internal Rate of Return (IRR) is called the Discounted Cash Flow approach. The Payback period can be calculated using the discounted (present) values of future cash inflows. The Payback period calculated using this method is what's called the Discounted Payback Period. The Net Present Value is calculated using the present value of the investments and future cash inflows. None of the above (all of the above are correct)
Discounting an investment’s cash flows using the internal rate of return will result in which of the following? Group of answer choices net present value of one net present value of zero positive net present value negative net present value
,Match the following terms with the appropriate definition.Effective yield or interest rateMonetary liabilityCompound interestPresent ValueFuture value of a single amountA.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.
Please answer the following question. In this method, the company compares the amount spent on the investment with the discounted expected future cash inflows. a.Payback b.NRV c.Investment d.IRR
You identify an investment project with the following cash flows. If the discount rate is 10%, what is the present value of these cash flows? Y1- $500 Y2- $550 Y3- $800 Y4- $450. Please type answer no write by hend.
4. Present value Finding a present value is the reverse of finding a future value. Which of the following is true about finding the present value of cash flows? -Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return. -Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return. Which of the following investments that pay will $18,000 in 4 years will have a lower price today? -The security earns an interest rate of 4.00%. -The security earns an interest rate of 6.00%.
2. Future value The principal of the time value of money is probably the single most important concept in financial management. One of the most frequently encountered applications involves the calculation of a future value. The process for converting present values into future values is called . This process requires knowledge of the values of three of four time-value-of-money variables. Which of the following is not one of these variables? The interest rate (I) that could be earned by deposited funds The trend between the present and future values of an investment The duration of the deposit (N) The present value (PV) of the amount deposited All other things being equal, the numerical difference between a present and a future value corresponds to the amount of interest earned during the deposit or investment period. Each line on the following graph corresponds to an interest rate: 0%, 9%, or 17%. Identify the interest rate that corresponds…
3. Present value Finding a present value is the reverse of finding a future value. Which of the following is true about finding the present value of cash flows? Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return. Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return. Which of the following investments that pay will $18,500 in 8 years will have a higher price today? The security that earns an interest rate of 8.50%. The security that earns an interest rate of 12.75%. Eric wants to invest in government securities that promise to pay $1,000 at maturity. The opportunity cost (interest rate) of holding the security is 13.80%. Assuming that both investments have equal risk and Eric’s investment time horizon is flexible, which of the following investment options will…
Present its feasibility using 1. Rate or Return Method 2. Annual Worth Method 3. Present Worth Method 4. Future Worth Method 5. Payback Method All method should be presented with the cash flow diagram