The Discount Factor Used to Obtain the Present Value of Money

question 68

Multiple Choice

The discount factor used to obtain the present value of money in the next period where k represents the rate of return is

• A)k.
• B)1 + k.
• C)1/(1 + k).
• D)k /(1 + k).

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Definitions:

Intra-entity Transfers

Transactions of goods, services, or funds between units of the same company, often requiring elimination adjustments during consolidation.

Straight-Line Method

A method of calculating depreciation and amortization, dividing the difference between an asset's cost and its salvage value by the number of years it is expected to be used.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Net Income Attributable

The portion of net income (profit) that is available to the shareholders, after accounting for dividends to preferred stockholders and other adjustments.