An Understanding of the Present Value of a Future Rand

question 104

Multiple Choice

An understanding of the present value of a future rand is important when one is using:

• A)the payback period method.
• B)discounted cash flow techniques.
• C)the accounting return on investment technique.
• D)the investment outlay valuation technique.

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Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that a consumer can afford with their income level.

Production Possibilities Curve

A graphical representation that shows the maximum number of goods or services that can be produced using limited resources.

Full Employment

A situation in which all available labor resources are being used in the most economically efficient way, often characterized by the absence of cyclical unemployment.

Entrepreneur

An individual who takes on the risk of starting and managing a business venture to achieve financial returns or other personal objectives.