If You Must Calculate the Present Value of an Amount

question 66

Multiple Choice

If you must calculate the present value of an amount at 12% compounded quarterly for two years,then the interest factor used in the calculation is

• A)3% for eight periods.
• B)12% for eight periods.
• C)the interest factor for 12% for two periods divided by 4.
• D)None of these are correct

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Definitions:

Budgeting

The process of creating a financial plan or forecast for a specific period, detailing expected revenues and expenditures.

Employee Salaries

Fixed payments made to employees for their services over a specified period, typically monthly or bi-monthly.

Budgeting

The process of creating a financial plan to manage revenue and expenses for a specific period, often key to strategic planning in businesses and personal finance management.

Activity Variance

The difference between the budgeted amount of an activity and the actual amount incurred.