Before You Can Calculate the Present Value of a Cash

question 60

Multiple Choice

Before you can calculate the present value of a cash flow,you must

• A)Identify the amount and timing of each cash flow
• B)Determine the appropriate discount rate
• C)Both identify the amount and timing of each cash flow and determine the appropriate discount rate
• D)Neither identify the amount and timing of each cash flow nor determine the appropriate discount rate

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Definitions:

Profit-Sharing Program

A company policy where employees receive a share of the company's profits, typically distributed as bonuses or retirement funds.

Flexible/Medical Savings Account

A type of savings account that allows individuals to set aside pre-tax money for eligible healthcare expenses.

401(k)

A retirement savings plan sponsored by an employer that allows workers to save and invest a piece of their paycheck before taxes are taken out.

Sigmoidoscopy

A medical examination of the lower part of the colon using a flexible tube with a light and camera at the end.