A Method by Which One Can Compare Cash Flows Across

question 85

Multiple Choice

A method by which one can compare cash flows across time-either as what a future cash flow is worth today (present value) or what an investment made today will be worth in the future (future value) -is called

• A)time-value of money.
• B)compounding.
• C)simple interest.
• D)opportunity cost.

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Definitions:

Serial Bonds

A type of bond issue that is structured so that a portion of the bonds matures at different intervals over a period of time, facilitating the gradual repayment of the debt.

Interest Expense

The cost incurred by an entity for borrowed funds, reported on the income statement as part of operating expenses if related to core operations, or as non-operating expenses if it is not.

Bonds Outstanding Method

A technique used to calculate the total amount of bonds that are currently issued and not yet redeemed or paid off by the issuer.

Note Receivable

A written promise for amounts to be received by a business, typically including interest, from another party.