The Time Value of Money Concept Is Given Consideration in Long-Range

question 2

Multiple Choice

The time value of money concept is given consideration in long-range investment decisions by:

• A) using the payback method and at least one other method to make an evaluation.
• B) assuming equal annual cash flow patterns.
• C) investing only in short term projects.
• D) assigning greater value to more immediate cash flows.

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Definitions:

Prime Borrowers

Individuals who are considered low-risk by lenders due to their excellent credit history and are thus likely to receive better loan terms.

Government-sponsored Enterprises

Special financial services corporations created by the United States Congress to enhance the flow of credit to specific sectors of the economy, such as housing.

Loanable Funds

Financial resources available for borrowing, often depicted in the market where savers supply funds and borrowers demand funds.

Political Influence

The impact that individuals, groups, or organizations have on political decisions, policies, and the legislative process.