The Shorter the Length of Time Between a Present Value

question 41

Multiple Choice

The shorter the length of time between a present value and its corresponding future value,

• A) the lower the present value, relative to the future value.
• B) the higher the present value, relative to the future value.
• C) the higher the interest rate used in the present-valuation.
• D) none of these.

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Definitions:

Control Purposes

The use of various management and accounting mechanisms to monitor, manage, and optimize the performance and efficiency of an organization.

Sales Forecasts

Sales forecasts are predictions of future sales volumes, often based on historical sales data, market analysis, and anticipated market changes.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, typically used to assess liquidity and manage cash flow.

Funds Available

The total resources, including cash and credit, that are accessible for use in operations, investments, or other financial activities.