What Term Is Used for the Present Value of Future

question 4

Multiple Choice

What term is used for the present value of future cash flows after netting out the initial cash flow?

• A) Net future value
• B) Gross future value
• C) Gross present value
• D) Net present value

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), representing the profit a company makes from its operations.

Unit Selling Price

The price at which an individual unit of a product is sold to customers.

Unit Variable Costs

These are the costs that change directly with the level of production or service activity, such as materials and labor.

Break-even Sales

The amount of revenue required to cover total fixed and variable costs, resulting in neither profit nor loss.