the process of caltucalting the present value of a future cash flow is calked compouding? true...
Homework Answers
Answer : False
This is false because the process of calculating the present value of future cash flow is called discounting where we discount the cash flows occuring in the future by the discount rate to get the present value of cash flow. Compouding on the other hand is the process of calculating the future value of the cash flow using the series of cash flows and the compouding rate.
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process of caltucalting the present value of a future cash flow is
calked compouding?
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What are three methods used to calculate the present value of a future cash flow?
The Timing and Value of Cash FlowsMy chapter outline is listed as follows (The methods should be pertaining to these concepts):Valuing Claims to Future Cash Flows: A comparison approachThe Basis of Time Value Calculations: The Compounding ProcessThe Present Value of a Single Cash FlowThe Future Value of a Single Cash FlowThe Present Value of a Multiple Cash Flow StreamThe Future Value of a Multiple Cash Flow StreamThe Rate of Return on an InvestmentNon-Annual Compounding/Discounting Intervals
3. Discounting is the process of moving a present value sum to the future value and...
3. Discounting is the process of moving a present value sum to the future value and compounding is the process of moving a future value sum to the present value. A. True B. False
If the process of coming back to present value (PV) from future cash flows is called...
If the process of coming back to present value (PV) from future cash flows is called discounting, then the process of going to future value (FV) from present value (PV) is called compounding. (TRUE/FALSE)?_______________________ For a corporate bond, the quoted interest rate minus the real risk-free rate is equal to which of the following? Nominal interest rate Real inflation rate plus nominal interest rate Market risk premium The sum of inflation premium, default risk premium, liquidity premium and maturity risk premium
Present and Future Value of an Uneven Cash Flow Stream An investment will pay $200 at...
Present and Future Value of an Uneven Cash Flow Stream An investment will pay $200 at the end of each of the next 3 years, $400 at the end of Year 4, $500 at the end of Year 5, and $600 at the end of Year 6. If other investments of equal risk earn 9% annually, what is this investment's present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent. Present value: $ ...
A. The excess of the present value of future cash flows over the initial investment outlay...
A. The excess of the present value of future cash flows over the initial investment outlay for a project is the: 1. Internal rate of return (IRR) of the project 2. Modified internal rate of return (MIRR) on the project 3. Book (accounting) rate of return for the project 4. Net present value (NPV) of the project 5. Modified internal rate of return (MIRR) of the project B. Items that have cash flow effects during the operating phase of an...
The future value of a going concern is often measured by a discounted cash flow model....
The future value of a going concern is often measured by a discounted cash flow model. True or false?
Consider the following cash flow diagrams. In these diagrams the present value (P) and the future...
Consider the following cash flow diagrams. In these diagrams the
present value (P) and the future value (F) are economically
equivalent to the uniform series of payments (A) at a discount rate
of 8% per period. Is the value of P larger than F, equal to F, or
less than F?
QUESTION 1 Consider the following cash flow diagrams. In these diagrams the present value (P) and the future value (F) are economically equivalent to the uniform series of payments...
For computation of the present value of growing annuity with n periods, the cash flow for...
For computation of the present value of growing annuity with n periods, the cash flow for the current period is used and not the cash flow to be received in the next period. True False
Present and Future Value of an Uneven Cash Flow Stream An investment will pay $100 at...
Present and Future Value of an Uneven Cash Flow Stream An investment will pay $100 at the end of each of the next 3 years, $400 at the end of Year 4, $600 at the end of Year 5, and $800 at the end of Year 6. If other investments of equal risk earn 6% annually. What is its present value? Round your answer to the nearest cent. What is its future value? Round your answer to the nearest cent....
The Present Value of all the expected future free cash flow of your firm is $320...
The Present Value of all the expected future free cash flow of your firm is $320 million. The firm has $170 million of debt, and a cash balance of $30 million. If there are 13 million shares outstanding, what is the price of each share of this firm? $13.85 $9.85 $9.25 $40.00
3. Discounting is the process of moving a present value sum to the future value and compounding is the process of moving a future value sum to the present value. A. True B. False
Consider the following cash flow diagrams. In these diagrams the
present value (P) and the future value (F) are economically
equivalent to the uniform series of payments (A) at a discount rate
of 8% per period. Is the value of P larger than F, equal to F, or
less than F?
QUESTION 1 Consider the following cash flow diagrams. In these diagrams the present value (P) and the future value (F) are economically equivalent to the uniform series of payments...
For computation of the present value of growing annuity with n periods, the cash flow for the current period is used and not the cash flow to be received in the next period. True False
The Present Value of all the expected future free cash flow of your firm is $320 million. The firm has $170 million of debt, and a cash balance of $30 million. If there are 13 million shares outstanding, what is the price of each share of this firm? $13.85 $9.85 $9.25 $40.00
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