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.

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Definitions:

Lessor

The entity in a lease agreement that possesses the asset and allows the lessee to utilize the asset in return for payments of rent.

Break-Even Lease Payment

The break-even lease payment is the lease payment at which the cost of leasing equals the cost of owning, neither gaining nor losing financially over the term of the lease.

CCA Class

In tax terminology, specifically for Canadian taxation, a system categorizing business assets for the purpose of depreciation calculation.

Turret Lathe

A type of lathe that allows multiple machining operations, like drilling and cutting, to be performed sequentially on a workpiece without repositioning it.