The Rate Used to fiNd the Present Value of a Future

question 41

Multiple Choice

The rate used to find the present value of a future payment is called the:

• A) Simple rate.
• B) Discount rate.
• C) Compound rate.
• D) Future value rate.
• E) Loan rate.

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Definitions:

One-Line Method

An accounting technique used in the consolidation of financial statements where a parent company reports the net assets and results of a subsidiary in a single line.

Joint Venture Liabilities

The financial obligations that are incurred jointly by partners in a venture, which must be settled together.

Line-by-Line Method

A consolidation technique where the parent company combines its subsidiary's assets, liabilities, income, and expenses line by line into its own financial statements.

One-Line Method

An accounting technique used for combining the financial statement of a parent company and its subsidiary by reporting the investment in a single line.