I of the following choices are one of the four discounted cash flow (DCF) rules for time value of mo VOM) except O Quantities of money cannot be added or subtracted unless they occur at the same point in time. O To move money backward one time unit, subtract one plus the discount or interest rate. O Money has a time value.
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- There are four variables in the process of adjusting single cash flow amounts for the time value of money:present value (PV), future value (FV), i and n. If you know any three of these, the fourth can be computedeasilyThere are three categories of cash flows: single cash flows, also referred to as “lump sums,” a stream of unequal cash flows, and annuities. Based on your understanding of annuities, answer the following questions. 1. Which of the following statements about annuities are true? Check all that apply. An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period. An annuity is a series of equal payments made at fixed intervals for a specified number of periods. An annuity due earns more interest than an ordinary annuity of equal time. Ordinary annuities make fixed payments at the beginning of each period for a certain time period. 2. Which of the following is an example of an annuity? A job contract that pays a regular monthly salary for three years A job contract that pays an hourly wage based on the work done on a particular day 3. Eleanor loves shopping for clothes, but considering the state of the economy, she has decided to…TRUE OR FALSE. IF FALSE CORRECT THE SENTENCE. A. True OR False: Deferred Annuities are annuities that have payments that don't begin until after the end of the second period. B. Uniform gradient cash flow is a cash flow that increases by a uniform amount each period, beginning at the end of period one.
- Direction: Define, draw the cash flow diagram, and write the general formula of the following: ANNUITY 1. Ordinary Annuity a) Sum/Future of Ordinary Annuity b) Present Worth of Ordinary Annuity 2. Annuity Due 3. Deferred Annuitythere are two policies to consider when payment period is less than compounding period. These are related to interperiod cash flows earn. Select one: O True O FalseThe internal rate of return is: the discount rate that equates the present value of the cash inflows with the present value of the cash outflows. the discount rate that makes NPV negative and the PI greater than one. the rate of return that makes the NPV positive. the discount rate that makes the NPV positive.
- The discounted payback method considers the time value of money as well as the cash flows after the payback.Group of answer choices A.false B. trueIdentify on which side of the Cash T-account would the following amounts be shown? Select all that are correct. Multiple select question. decreases would be on the left side the ending balance would be on the right side increases would be on the right side the beginning balance would be on the left side the beginning balance would be on the right side the ending balance would be on the left side increases would be on the left side decreases would be on the right sideIn solving measurement problems involving the use of annuities, which of these four required conditions are not accurate? Periodic cash flows are equal in amount. Time periods between the cash flows are the same length. Interest rate is constant for each time period. Interest is compounded at the beginning of each time period.
- 4. Futurevalue of annuities II There are three categories of cash flows: single cash flows, also referred to as “lump sums,” a stream of unequal cash flows, and annuities. Based on your understanding of annuities, answer the following questions. Which of the following statements about annuities are true? Check all that apply. An annuity due earns more interest than an ordinary annuity of equal time. An annuity due is an annuity that makes a payment at the end of each period for a certain time period. Ordinary annuities make fixed payments at the end of each period for a certain time period. A perpetuity is a constant, infinite stream of equal cash flows that can be thought of as an infinite annuity. Which of the following is an example of an annuity? A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of time An investment in a certificate of deposit (CD) Becky has a large and growing…The PW-criterion accounts for the time value of money by converting the cash flows to the period corresponding to the present by using the equations or functional notations Select one: True O FalseFind the value of the interest rate (i) that causes the 2 cash flows below to be equivalent! given in the image. Note:hand written should be avoided