In Order to Accumulate Capital, Young Adults Are Likely to Have

question 120

Multiple Choice

In order to accumulate capital, young adults are likely to have to

• A) accept a lifestyle that sacrifices some amenities.
• B) live beyond their means.
• C) rely on credit cards for basic purchases in order to conserve on cash.
• D) borrow funds from a bank.

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Definitions:

Cash Flows

The full measure of financial transactions entering and leaving a business, essentially shaping its liquidity factor.

Discounted Cash Flow

An investment appraisal technique that values a project or an asset based on the present value of its expected future cash flows.

Valuation

The process of determining the present value of an asset or a company based on earnings, assets, and market comparisons.

Required Return

The minimum expected yield by investors to justify the risk of the investment.