Use the Following Two Columns of Items to Answer the Matching

question 83

Short Answer

Use the following two columns of items to answer the matching questions below:
-budget method
A)uses annual income times a factor to arrive at the amount of life insurance needed
B)determines the life insurance amount needed based on a budget

• A)uses annual income times a factor to arrive at the amount of life insurance needed
• B)determines the life insurance amount needed based on a budget

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Definitions:

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows equal to zero.

Present Value

The current valuation of a future sum of money or cash flows, when evaluated at a given rate of return.

Desired Rate of Return

The return a investor expects to achieve from an investment.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of investments.