Present Value Techniques

question 7

Multiple Choice

Present value techniques

• A)determine the effects of time value of money on future net income that will be generated.
• B)are a way of converting future dollars into their equivalent current dollars.
• C)provide more conservative results than similar time value of money computations.
• D)treat a dollar received today to be worth the value of a dollar to be received a year from today.

---

Definitions:

Present Value

The present value of an amount of money or series of cash inflows expected in the future, discounted at a given rate of return.

Benefits And Costs

The positive outcomes (benefits) and negative outcomes (costs) associated with a particular action or investment, often analyzed in decision-making.

Weak Property Rights

Situations where ownership rights are not fully enforced, leading to potential misuse or underinvestment in resources.

Faster Extraction

The increased rate at which natural resources are removed from the environment, often aiming to meet high demand but potentially leading to sustainability issues.