Use the Present Value and Future Value Tables Included in Appendix

question 33

Multiple Choice

Use the present value and future value tables included in Appendix 8 and on the textbook companion website.
-Which of the following is NOT a synonymous term to the others?

• A) Principal
• B) Face value
• C) Maturity value
• D) Future value

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Definitions:

Discounted Cash Flow

A valuation method used to estimate the attractiveness of an investment opportunity by calculating the present value of expected future cash flows using a discount rate.

Cash Payback Period

The duration of time it takes for an investment to generate enough cash flow to recover its initial outlay.

Straight-Line Method

A technique for figuring out an asset's depreciation, apportioning a consistent depreciation value annually throughout the asset's lifespan.

Net Present Value

Net Present Value (NPV) is 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 an investment.