Assume That X Represents a Sum of Money That Bill

question 110

Multiple Choice

Assume that X represents a sum of money that Bill has available to invest in a project that will yield a return of r.In the formula Y = X(1 + r) ,Y represents the

• A)future value of X in one period.
• B)future value interest factor associated with r.
• C)present value of X.
• D)present value interest factor associated with r.

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Definitions:

Fixed Intervals

Predetermined periods or times at which certain events or actions are scheduled to occur.

Net Present Value

Net Present Value is the calculation that measures the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Future Net Cash Flows

The estimated amount of cash that is expected to be received or paid out in the future, after accounting for all projected income and expenses.

Present Values

The current worth of a sum of money to be received or paid in the future, discounted at a specific interest rate.