You Have Been Asked to Compute the Cash Equivalent Price

question 12

Multiple Choice

You have been asked to compute the cash equivalent price of a machine assuming the cost (including principal and interest) is to be paid in two unequal payments after the acquisition date.Which of the following table values would be used to find the cost of the machine?

• A)Present value of a single amount.
• B)Present value of an annuity.
• C)Future value of a single amount.
• D)Future value of an annuity.

---

Definitions:

Unissued Stock

Shares that have been authorized in a company's charter but have not yet been issued to investors.

Shares

Units of ownership interest in a corporation or financial asset that provide a portion of the company's profits and losses to the shareholder.

Book Value

The net value of a company's assets minus its liabilities, often used to assess the company's worth on its balance sheet.

Noncontrolling Interest

A portion of equity in a subsidiary not owned by the parent company, reflecting the minority shareholders' ownership in the subsidiary's net assets and income.