An Important Element in Estimating the Present Value of an Investment

question 17

Multiple Choice

An important element in estimating the present value of an investment is the calculation of the discount factor. The discount factor may be expressed as _______ where r is the discount rate and n is the number of years the investment is held.

• A) 1 + r)ⁿ
• B) 1 + n)^r
• C) 1/1 + r)ⁿ
• D) 1/1 + n)^r

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Definitions:

LIFO

"Last In, First Out," an inventory valuation method where the costs of the newest products are the first to be expensed.

Queue Disciplines

The rules or policies that determine the order in which entities (like people or data packets) are served in waiting line systems.

Finite Population

A population set that contains a limited number of elements or individuals, making it possible to examine each member of the population in a study.

Arrivals

The process or count of items, people, or entities reaching a destination or entering a system at a particular time.