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- What will an investment or a series of investment be worth after a period of time?Which 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 periodWhat is the simple payback period? What is the net present value of the investment? What is the modified internal rate of return for the investment?
- Annual rate of return refers to the percentage at which an investment will generate profits or gains over a period of timeWhich of the following is not needed to compute the present value of an investment?a. The length of time between the investment and future receiptb. The interest ratec. The rate of inflationd. The amount of the receipTWhich of the following affects the present value of an investment? The type of investment (annuity versus single lump sum) The number of time periods (length of the investment) The interest rate All of the above
- 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 ______ _______.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 _________________.Payback period is the time in which the initial cost of an investment is expected to be recovered through the cash inflows generated by the investment. Briefly discuss the pros and cons of payback period?
- When computing an interest or growth rate, the rate will increase the smaller the future value, holding present value and the number of periods constant. Is this true or false?.........................is the processof accumulating interest in an investment over time to earn more interest.The payback method measures: The profitability of an investment. The net cash inflow from an investment. The economic life of an investment. How rapidly the investment is recovered. The investment’s true rate of return.
