The Process of Converting Future Cash Flows into Their Present

question 22

Multiple Choice

The process of converting future cash flows into their present value is called:

• A) annualizing.
• B) discounting.
• C) compounding.
• D) capital budgeting.

---

Definitions:

Leakage Current

The amount of current that flows through the dielectric separating the plates of a capacitor.

Dielectric Material

A non-conductive substance that is used to store electric charge, typically between the plates of a capacitor.

Series Connection

An electrical circuit arrangement where components are connected end-to-end in a single path for current to flow.

Total Capacitance

In parallel circuits, it's the sum of individual capacitances of all capacitors, and in series circuits, it's calculated through the reciprocal of the sum of the reciprocals of the individual capacitances.