Consider the Following Items of Information

question 6

Multiple Choice

Consider the following items of information:
I. The target recovery period.
II. The discount rate.
III. The timing (i.e., year) of a cash flow.
Which of the above items would be needed to calculate the present value of a cash flow?

• A) I only.
• B) II only.
• C) I and II.
• D) II and III.
• E) I, II, and III.

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Definitions:

Head of Household

A tax filing status for unmarried individuals who pay more than half the cost of keeping up a home for themselves and a qualifying individual.

1040EZ

A simplified federal income tax form for individuals with straightforward financial situations, no longer in use as of the 2018 tax year.

Underpayment Penalty

A fine imposed by tax authorities on taxpayers who do not pay enough of their total estimated tax and withholding.

Estimated Payments

Periodic payments on expected taxes for the current year, typically paid quarterly by self-employed individuals and others with income not subject to withholding.