Which of the Following Would Not Be Reported on the Balance

question 125

Multiple Choice

Which of the following would not be reported on the balance sheet as a cash equivalent?

• A)Money market fund
• B)Sixty-day certificate of deposit
• C)Six-month Treasury bill
• D)Money market savings certificate

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Definitions:

Discount Rate

The interest rate that a central bank charges financial institutions for short-term loans, or used in discounted cash flow (DCF) analysis to present value future cash flows.

APR

The Annual Percentage Rate, which is the interest rate for a whole year on a loan, including fees.

Present Value Payback Period

A capital budgeting technique that calculates the period of time required for the present value of future cash flows to cover the initial investment cost.

NPV

Net Present Value, a calculation used to determine the current value of a series of future cash flows.