When Computing a Present Value, Which of the Following Is

question 91

Multiple Choice

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

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

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Definitions:

Cost of Goods Sold

Straightforward expenses incurred in the manufacture of merchandise a company sells, involving costs of materials and labor.

Days' Sales

A financial metric that estimates a company's average collection period for receivables, often expressed in days.

Solvency

The ability of a company to meet its long-term debts and financial obligations.

Average Inventory

The mean value of inventory a business has over a certain period of time, calculated to assess inventory turnover and management efficiency.