Photo from MR. A b) How might they be mathematically related whenapplied to interest - type investments where yourmoney is invested at the beginning of the year? FV == Present ValuePV × (1 + i) n where; Future Value (FV)(PV) + the accumulated and compounded Interest, "i"is the interest rate and n is the number of years ofinvestment. (c) How might they be mathematicallyrelated when applied to mining - type investmentswhere your investment consists of amounts spentthroughout the year and you only receive money backfrom the mine's eventual product sales? Provide someexplanation for the difference

b) Interest-Type Investments: In the case of interest-type investments, you're often dealing with a…

Answered: b) How might they be mathematically…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 13MC: Which of the following discounts future cash flows to their present value at the expected rate of...

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,Match the following terms with the appropriate definition.Effective yield or interest rateMonetary liabilityCompound interestPresent ValueFuture value of a single amountA.Fixed obligation to pay an amount in cash.B.The rate at which money will actually grow.C.Interest accumulates on interest.D.Current worth of future cash flows.E.The money to which an amount invested will grow over time.
The value of a sum after investing over one or more periods is calleda) Discount Valueb) Nonec) Compound and future valued) Present value
Select all of the time value of money factors that are known in a NPV assessment. O Present value of single-sums O Present value of annuities O Interest rate Number of periods O Future value of single-sums O Future value of annuities
Which figure of merit provides an interest rate at which the present value of the future cash flows equals the amount invested? a) NPV b) IRR c) Cap Rate d) DCF Please ensure accuracy and explain your choice
Present value represents: (LO C-2) a. The value today of receiving money in the future. b. The amount that an investment today will grow to be in the future. c. The difference between the initial investment and the growth of that investment over time. d. A series of equal payments.
Question 3.Match the following terms with the appropriate definition.Future ValueTime value of moneyMonetary AssetPresent value of a single amountSimple interestA.Claim to a fixed amount of cash.B.A dollar now is worth more than a dollar later.C.Based on initial investment only.D.Amount today equivalent to a specified future amount.E.Accumulation of an amount with interest.
The present value of a future cash flow is computed by multiplying the future cash flow value with the: O discounting factor. O number of periods. O compounding factor. O interest rate.
Which of the following discounts future cash flows to their present value at the expected rate of return, and compares that to the Initial Investment? A. internal rate of return (IRR) method B. net present value (N PV) C. discounted cash flow model D. future value method
A primary strength of the net present value method for analyzing investments is that it accounts for the amount and timing of earnings for that investment. A. True B. False
The present value of an investment's future cash flows divided by its initial cost is the: O Net present value. O Internal rate of return. O Average accounting return. O Profitability index. O Payback period.
The actual interest paid or earned is commonly referred to as the: a. Risk premium. b. Annual effective interest rate. c. Nominal interest rate. d. Real rate of return.
Which of the following is a series of constant cash flows that occur at the end of each period for some fixed number of periods .... A. Annuity B. Mezzanine Debt C. Perpetuity D. Original Investment

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