Which of the following statement reflects the true meaning of the present Value? (2)L Discounting to today's valueProjecting the future values. Presenting cash flows in compounded valuesN. Converting monetary values in to an expected interest rateChoose the correct option below;O Only IIOBoth II & IIO None of the aboveO Only IIOnly I Clicks Pty(Ltd) is a well-developed cosmetics and chemist company trading in almost all South African markets,with a recent product liability encrypted in a racial discrimination advert. The company paid the value of commonstock for the following; per-share dividend expected at the end of year will be R 15.00, required return on commonstock @ 0.15 and constant rate of growth in dividends @ 7%.From the given information the value of constant-growth valuation model for the investors in the marketplace forDisChem (Pty) is R 187.50OTrueOFalseINGTEFUBVTE

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Which of the following statement reflects the true meaning of the present Value? (2) LDiscounting to today's value Projecting the future values Presenting cash flows in compounded values N Converting monetary values in to an expected interest rate Choose the correct option below: O Only II OBoth II& IIl ONone of the above OOnly II Only

Which of the following statement reflects the true meaning of the present Value? (2) LDiscounting to today's value Projecting the future values Presenting cash flows in compounded values N Converting monetary values in to an expected interest rate Choose the correct option below: O Only II OBoth II& IIl ONone of the above OOnly II Only

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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Which of the following statements correctly describe how the present value of a future expected cash flow may vary with different factors? Group of answer choices A. More than one of the other options are correct. B. As the expected loss of purchasing power due to inflation increases, then, holding all else constant, the present value of a future expected cash flow will decrease. C. As the period of time we have to wait until we receive a future expected cash flow decreases, then, holding all else constant, the present value of the cash flow will decrease. D. As the risk associated with a future expected cash flow increases, then, holding all else constant, the present value of the cash flow will increase.
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 duration of the investment (N) The inflation rate indicating the change in average prices The present value (PV) of the amount invested The interest rate (I) that could be earned by invested funds
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Choose the correct option- "This is the rate at which present value of cash inflows are equal to the present value of cash outflows". a. NPV b. IRR c. Payback period
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. A. 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 inflation rate indicating the change in average prices The duration of the investment (N) The interest rate (I) that could be earned by invested funds The present value (PV) of the amount invested B. Investments and loans base their interest calculations on one of two possible methods: the interest and the. interest methods. Both methods apply three variables—the amount of principal, the interest rate, and the investment or deposit period—to the amount deposited or invested in order to compute…
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Suppose an investor observes an upward term structure of interest rate. Answer the followingquestions. (a) According to the expectation hypothesis, what will be the investor’s forecast about futurechange of interest rate (increase, decrease or unchanged)? (b) What will the investor say about the future change of interest rate according to liquiditypreference theory? Explain your argument.
Identify the one true statement. a. The B/C method determines the ratio of the present worth of benefits to the negative of the future worth of the investments. b. The CW method determines the present worth using a finite planning horizon. c. The IRR method determines the interest rate that yields a future worth of zero. d. The ERR method determines the interest rate that yields a present worth of zero.
If cashflows are discounted at____ the net present value is zero a. Internal rate of return O b. Wighted average cost of capital O c. Higher payback period O d. Any payback period
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