Which Expression Is Used to Calculate the Present Value of an Amount

question 80

Multiple Choice

Which expression is used to calculate the present value of an amount of money?

• A)Future Value × (1 + interest rate)time
• B)Future Value/(1 + interest rate)time
• C)Future Value × (1 + time)interest rate
• D)(1 + interest rate)time/Future Value

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Definitions:

Net Working Capital

Net working capital measures a company's short-term financial health, calculated as current assets minus current liabilities, indicating its ability to fulfill short-term obligations.

Inventory Levels

The quantity of goods and materials on hand that are available for sale or production processes in a company.

Pay Suppliers

The process of settling financial obligations to suppliers by providing them with the agreed-upon payment for goods or services purchased on credit.

Opportunity Costs

The price paid by not choosing the second-best option available during decision-making.