Which of the Following Statements Is True

question 15

Multiple Choice

Which of the following statements is true?

• A) The longer the time period that funds are invested, the greater the future value.
• B) The lower the discount rate that funds are invested at, the greater the future value.
• C) The shorter the time period that funds are invested, the greater the future value.
• D) The higher the interest rate, the slower the value of an investment will grow.

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Definitions:

Net Book Value

The value of an asset as recorded on the balance sheet, subtracting accumulated depreciation or amortization from its original cost.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the consumption or wear and tear of the asset.

Carrying Value

Also known as book value, it is the value at which an asset is recognized in the balance sheet after accounting for depreciation, amortization, and impairment charges.

Consolidated Financial Statements

Combined financial statements of a parent company and its subsidiaries, presenting the financial position and results of operations of these separate entities as a single economic entity.