Discount Points Are More Likely to Be Used During Periods

question 78

Multiple Choice

Discount points are more likely to be used during periods of

• A) tight money.
• B) available money.
• C) cash sales.
• D) seller financed sales.

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Definitions:

Project's Cash Flows

The inflows and outflows of cash associated with a specific project, considered in its financial analysis.

Reinvested

Pertains to the act of putting earnings or profits back into the business or project instead of paying them out as dividends.

Discount Rate

The interest rate used to discount future cash flows to their present value, reflecting the opportunity cost of capital.

Internal Rate Of Return

A financial metric used to estimate the profitability of potential investments, calculated as the rate that makes the net present value of all cash flows from a particular project equal to zero.