Present value represents: (LO C-2) a. The value today of receiving money in the future. b. The amount that an investment today will grow to be in the future. c. The difference between the initial investment and the growth of that investment over time. d. A series of equal payments.
Q: I was thinking about the topic B. What would be the answer : b. Ignoring tax, depreciation, and…
A: Payback period is a capital budgeting technique which helps the company in knowing that in…
Q: What do you understand by the present value of money? Group of answer choices A. Amount borrowed or…
A: Present value of money is the present worth of future payments.
Q: Which of the following is true about present value calculations? Other things remaining equal, the…
A: The value of any cash flow at immediate current date is called the present value(PV) which is…
Q: _____isthe difference between the gross present value of the benefits of that action and the amount…
A: The difference between the present value of benefits and amount of investment is the key evaluation…
Q: u are given two choices of investments, Investment A and Investment B. Both investments have the…
A: Introduction: The term present value can be defined as the current value of future set of cash flows…
Q: 1.A method of estimating property value by discounting on expected future cash flows to a present…
A: Comment- We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Match each sentence to the correct concept. a) The amount an investment is worth after one or more…
A: The answers along with explanation are provided in the next step.
Q: 4 (a) Evaluate the cash flow diagram given by the figure below. Determine a Net Present Value and a…
A: First, we will calculate the NPV using the rates provided and cash flows then we will calculate the…
Q: What is the payback period and the IRR in the following cash flow: Year end 1 2 3 4 Cash Flow -3,345…
A: Let CF = Annual cashflow Let IRR = r n = 4 years
Q: The amount of money in an investment is modeled by the function A = 600(1.0317)'. The variable A…
A: given, A=600×1.0317tt = no of years since 2006
Q: Briefly explain the following; a. present value of money. b. future value of money.
A: a) Present value of money Answer: The present value is nothing but the actual value of the future…
Q: ,Match the following terms with the appropriate definition.Effective yield or interest rateMonetary…
A: Eeffective yield or interest rate is a rate at which the amount invested actually grows over a…
Q: Finding a present value is the reverse of finding a future value. Which of the following is true…
A: Hi, Thanks for the Question. Since you asked multiple questions. We will answer first question for…
Q: Requirements: (a) What is the cash payback period for this proposal? (b) What is the annual rate of…
A: cash pay back period is the period by which the initial investment is recovered. so it 2 years +…
Q: a) Explain the term 'annuity'. b) What is meant by 'investment appraisal? c) Explain the term…
A: As you have asked a question with multiple parts, we will solve the first 3 parts as per the policy…
Q: Future value refers to the worth today of some amount of money received in the future. O True False
A: Future value is defined as a technique for computing how much the present value of PV of a asset or…
Q: What can you calculate with the Excel argument FV? Number of periods of time for a loan or…
A: Future value is the value of the current assets or some amount that is invested today and the amount…
Q: The principal of the time value of money is probably the single most important concept in financial…
A: Note: This post has multiple questions. The third cannot be answered because the timelines have not…
Q: b. The cash payback period. years c. The net present value. Use the above table of the present value…
A: (a) Average Rate of Return = 25% (b) Payback Period = 4 Year (c) Net Present Value = $ 66,495
Q: Question 3.Match the following terms with the appropriate definition.Future ValueTime value of…
A: Future value is the amoutn received at the end of future period along with interest.Time value of…
Q: The following describes fime value of money, except a Peso received today is worth more than a Peso…
A: The time value of money is the broadly acknowledged guess that there is more noteworthy advantage…
Q: Investments A and B have the net cash flows given. Value UI T Ior Which PW (1)c PW (1)p? 10. End of…
A:
Q: Compute for the following: 1. Accounting rate or return based on the average investment 2. Net…
A: The capital budgeting is a technique that helps to analyze the profitability of the project.
Q: Consider the following investment cash flows with the interest rate of 9% compounded annually. End…
A: According to the rule, we will answer the first three subparts only, for the remaining parts, kindly…
Q: Which of the following investments has a higher present value, assuming the same (strictly positive)…
A: We will assume a rate of 9% for a better explanation
Q: What refers to the cost of borrowing money or the amount earned by a unit principal per unit time?…
A: Solution Rate of Interest The rate of interest is that the quantity a lender charges for the use of…
Q: Select all of the time value of money factors that are known in a NPV assessment O Present value of…
A: npv : IT IS THE DIFFERENCE BETWEEN PRESENT VALUE OF CASH INFLOW AND PRESENT VALUE OF CASHOUTFLOW.
Q: Machinery purchases, initial investments, premium payments, or extra payments after the starting…
A: Initial capital include cost of Machinery purchases, cost of initial investments, premium payments…
Q: a. The average rate of return, assuming the annual earnings are equal to the net cash flows less the…
A: A ) Average rate of return: Yearly net cash flows = $ 53000 Equipment cost = $ 106000 Useful life…
Q: PRESENT VALUE FORMULA Please provide the formula for finding the Present Value of money and explain…
A: Definition: Time value of money: Time value of money refers to the concept that the value of money…
Q: a. Determine the interest rate if the money was compounded continuously. b. Determine the effective…
A: Effective annual rate (EAR) refers to a real interest rate which an investor is expect from his…
Q: g. The amount of money today that is consider equivalent to the cash flows expected to take place in…
A: Capital budgeting is the process of making decisions in long term assets. It is the process of…
Q: An accountant of a company is trying to calculate what amount needs to be invested today to produc…
A: The amount needs to ne invested today to produce some amount in future is known as Present Value.
Q: Which of the following affects the present value of an investment? a. The type of investment…
A:
Q: a. What is the simple payback period for Alternative 1? b. What is the annual worth of Alternative…
A: As per policy we answer only 3 sub questions in a single question. Please repost the unanswered…
Q: Finding a present value is the reverse of finding a future value. Which of the following is true…
A: Part 1) Finding a present value is the reverse of finding a future value. Present Value is tells…
Q: All else equal, the future value of a lump-sum amount invested today will increase if the *…
A: One dollar offered today is not worthy if it is offered in the future. It means if the investor…
Q: Which of the following affects the present value of an investment? The type of investment (annuity…
A: Present value of the investment: Present value of the investment is calculated using the cash flows…
Q: Explain the Net Present Value relating to investment of funds in long term investments briefly.
A: Net Present Value is the present value of cash inflows minus present value of cash outflows. It is a…
Q: FUTURE VALUE FORMULA Please provide the formula for finding the Future Value of Money.
A: Future value: Dollar earned today is more valuable than dollar earned tomorrow. Value of an asset at…
Q: 2. Present value Aa Aa Finding a present value is the reverse of finding a future value. Which of…
A: Present Value is a value of today for all the cashflows generated in the future period of time. The…
Q: What does the Excel argument Nper refer to? Number of periods of time for a loan or investment.…
A: Nper is important argument in EXCEL while calculating present value or future value in financial…
Step by step
Solved in 2 steps
- 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 periodMatch each sentence to the correct concept. a) The amount an investment is worth after one or more time periods is referred to as_______________b) The process of finding the present value of some future amount is called_________________.c) Calculating the present value of a future cash flow to determine its value today isknown as _________________.d) Interest earned on the principal and may be for a number of years may be called______________e) ___________ is the process of accumulating interest in an investment over time toearn more interest.f) The interest earned on both the initial principal and the interest reinvested from prior periods is referred to as ______ _______.Match each sentence to the correct concept. a) the amount an investment is worth after one or more time periods is referred to as............................ b) the process of finding the present value of some future amount is called.............................. c) calculating the present value of a future cash flow to determine its value today is known as....................................... d) Interest earned on the principal and may be for a number of years may be called...................................... e .................................. is the process of acculating interest in an investment over time to earn more interest. f) the interest earned on both the initial principal and the interest reinvested from prior periods is reffered to as............... ..........................
- . Match each sentence to the correct concept. a) The amount an investment is worth after one or more time periods is referred to as_______________b) The process of finding the present value of some future amount is called_________________.c) Calculating the present value of a future cash flow to determine its value today isknown as _________________.d) Interest earned on the principal and maybe for a number of years may be called______________e) ___________ is the process of accumulating interest in an investment over time toearn more interest.f) The interest earned on both the initial principal and the interest reinvested fromprior periods is referred to as ______ _______.Identify the concept. a) The amount an investment is worth after one or more time periods is referred to as _______________ b) The process of finding the present value of some future amount is called _________________.c) Calculating the present value of a future cash flow to determine its value today is known as _________________.d) Interest earned on the principal and may be for a number of years may be called ______________e) ___________ is the process of accumulating interest in an investment over time to earn more interest.f) The interest earned on both the initial principal and the interest reinvested from prior periods is referred to as ______ _______.a) The amount an investment is worth after one or more time periods is referred to as _______________ b) The process of finding the present value of some future amount is called _________________. c) Calculating the present value of a future cash flow to determine its value today is known as _________________. d) Interest earned on the principal and may be for a number of years may be called ______________ e) ___________ is the process of accumulating interest in an investment over time to earn more interest. f) The interest earned on both the initial principal and the interest reinvested from prior periods is referred to as ______ _______.
- Match each sentence to the correct concept. a) The amount an investment is worth after one or more time periods is referred to as _______________ b) The process of finding the present value of some future amount is called _________________.Finance The time value of money refers to: a) Factors that show future value b) Factors that show past value c) Concept that a dollar received today is worth more than a dollar received in the future d) Concept that a dollar received today is worth less than a dollar received in the future explain in detailWhich 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
- The accounting rate of return (also known as the unadjusted rate of return) can be calculated as: (See your Chapter 25 notes, page 2) Initial cost of the investment divided by the annual net cash inflow Initial cost of the investment minus the annual net cash inflow Average amount of the investment divided by the average annual net income Average annual net income divided by the average amount of the investment Present value of net cash inflow divided by the initial cost of the investment Annual net cash inflow minus the initial cost of the investment Future value of net cash inflow divided by the initial cost of the investment Present value of the net cash inflow minus the initial cost of the investmentWhich investment criteria answers the question: "How quickly do we recover our investment, in nominal dollars?" A) net present value B) internal rate of return C) profitability index D) payback periodA dollar today is worth more than a dollar to be received in the future. The difference between the presentvalue of cash flows and their future value represents the time value of money. Interest is the rent paid forthe use of money over time.
