When Using the Pmt Function,principal Is Another Term for the ________

question 37

Multiple Choice

When using the Pmt function,principal is another term for the ________ of a loan.

• A) rate
• B) duration
• C) future value
• D) present value

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Definitions:

Net Present Value

A valuation method that calculates the present value of future cash flows generated by an investment, minus the initial investment cost.

Cash Flows

The movement of money into and out of a business, project, or financial product, considered essential for assessing the health and sustainability of an entity.

Return on Investment

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the profit from an investment by the cost of the investment.

Capital Budgeting

The process businesses use to evaluate and select long-term investments such as new machinery, replacement machinery, new plants, new products, and research development projects.