To Compute the Future Value of a Cash Flow, You

question 99

Multiple Choice

To compute the future value of a cash flow, you must ________.

• A) discount it
• B) compound it
• C) double it
• D) arbitrage it

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Definitions:

Fair Value

An estimate of the price at which an asset or liability could be exchanged in a current transaction between willing parties, other than in a liquidation sale.

Liability Recognition

The process of recording liabilities on the financial statements, ensuring that all existing debts and obligations of a company are reported in accordance with accounting principles.

Note Receivable

A financial asset representing a promise to receive a definite amount of money at a future date, typically with interest.

Impaired

A reduction in the recoverable value of an asset below its carrying value on the balance sheet, leading to recognition of an impairment loss.