The Process of Converting Future Cash Flows to What Its

question 28

Multiple Choice

The process of converting future cash flows to what its present value is:

• A) time value of money.
• B) discounting.
• C) compounding.
• D) none of the above.

---

Definitions:

Tax Liability

The total amount of tax that an individual or organization owes to the tax authorities.

401k Contributions

401k contributions are pre-tax or post-tax money individuals contribute to their 401k retirement savings plan, often matched by their employer to some extent.

Biweekly Paycheck

A payment method where employees receive wages every two weeks, resulting in 26 paychecks per year.

Compounded Monthly

The interest calculation method where interest is added to the principal balance monthly, leading to interest on interest.