To Calculate the Present Value of an Annuity,multiply

question 36

Multiple Choice

To calculate the present value of an annuity,multiply

• A)The principal amount by the present value factor
• B)The amount to be received each year by the present value factor
• C)The principal by the discounted interest rate
• D)The amount to be received each year by the discounted interest rate

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Definitions:

Operating Cycle

The amount of time it takes for a company to turn its inventory into cash flows from sales.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a given period.

Accounts Receivables

Outstanding payments owed by clients to a company for goods or services that have been delivered, but payment has not been received.

Commitment Fee

A charge levied by a lender on a borrower for an agreed loan commitment that has not yet been utilized.