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The value of a sum after investing over one or more periods is called
a) Discount Value
b) None
c) Compound and
d) Present value
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- The present value of a future cash flow is computed by multiplying the future cash flow value with the: O discounting factor. O number of periods. O compounding factor. O interest rate.The discount rate used in a net present value analysis is the ________. A. rate of interest earned on a savings account B. rate of inflation C. rate of interest charged for debt financing of an investment D. required rate of return or the hurdle rateSelect all of the time value of money factors that are known in a NPV assessment. O Present value of single-sums O Present value of annuities O Interest rate Number of periods O Future value of single-sums O Future value of annuities
- 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 valueWhich of the following method is used for calculating Time value of Money? a. Future Value b. All of the options c. Annuity method d. 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.
- The process of reinvesting interest earned to generate additional earnings over time is ________. A. compounding B. discounting C. annuity D. lump-sumWhich of the following discounts future cash flows to their present value at the expected rate of return, and compares that to the Initial Investment? A. internal rate of return (IRR) method B. net present value (N PV) C. discounted cash flow model D. future value methodWhat is the difference between the discount rate used for net present value and the internal rate of return methods?
- Which method does not consider the time value of money? Choose the correct. A. Net present value B. Internal Rate of Return C. Average rate of return D. Profitability IndexThe measurement basis most often used to report a long-term payable representing a commitment to pay money at a determinable future date is Historical cost. Current cost. Net realizable value. Present value of future cash flows.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