When Computing a Present Value,which of the Following Is TRUE

question 78

Multiple Choice

When computing a present value,which of the following is TRUE?

• A)You should adjust the discount rate to match the time period of the cash flows.
• B)You should adjust the future value to match the present value.
• C)You should adjust the time period to match the present value.
• D)You should adjust the cash flows to match the time period of the discount rate.

Understand the components of a firm's capital, and their relative costs.

Calculate the after-tax cost of debt and understand its influence on the weighted average cost of capital (WACC).

Apply the dividend growth model to estimate the cost of common equity.

Differentiate between book value and market value and understand the relevance of each in calculating WACC.

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Definitions:

CAM

Complementary and Alternative Medicine, which refers to a broad range of healthcare practices that are not part of a country's own tradition or conventional medicine.

Aromatherapy

A holistic healing treatment that uses natural plant extracts to promote health and well-being, often through inhalation or application of essential oils.

Health Maintenance

Activities and behaviors aimed at preserving health and preventing disease, including regular exercise, balanced diet, and preventive healthcare.

Avoidance

A psychological coping mechanism that entails keeping away from certain thoughts, feelings, or situations that may cause distress.