Discounting Refers Directly to

question 53

Multiple Choice

Discounting refers directly to

• A)finding the present value of a future sum of money.
• B)finding the future value of a present sum of money.
• C)calculations that ignore the phenomenon of compounding for the sake of ease and simplicity.
• D)decreases in interest rates over time,while compounding refers to increases in interest rates over time.

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Definitions:

Incremental Overhead

The additional overhead costs incurred as a result of a specific business activity or decision.

Salary Expense

The total amount paid to employees for services rendered during a specific period, usually shown in the income statement.

Opportunity Cost

The value of the best alternative forgone when a choice is made between different options.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.