Which of the following statements is FALSE?
A: Finding the present value and compounding are the same.
B: A dollar today and a dollar in one year are not equivalent.
C: If you want to compare or combine cash flows that occur at different points in time, you first need to convert the cash flows into the same units or move them to the same point in time.
D: The equivalent value of two cash flows at two different points in time is sometimes referred to as the time value of money.
A: Finding the present value and compounding are the same.
B: A dollar today and a dollar in one year are not equivalent.
C: If you want to compare or combine cash flows that occur at different points in time, you first need to convert the cash flows into the same units or move them to the same point in time.
D: The equivalent value of two cash flows at two different points in time is sometimes referred to as the time value of money.
举一反三
- You have determined the profitability of a planned project by finding the present value of all the cash flows from that project. Which of the following would cause the project to look more appealing in terms of the present value of those cash flows? ( ) A: Statements a and b are correct. B: C: Statements b and c are correct. D: The cash flows are extended over a longer period of time, but the total amount of the cash flows remains the sam E: The discount rate decreases. F: The discount rate increases.
- The profitability index is the ratio of the A: future value of cash flows to investment. B: net present value of cash flows to investment. C: net present value of cash flows to IRR. D: present value of cash flows to IRR.
- The ________ approach computes the differences in cash flows between two alternatives and then finds the present value of these differences.
- A perpetuity is defined as a sequence of A: equal cash flows occurring at equal intervals of time for a specific number of periods. B: equal cash flows occurring at equal intervals of time forever. C: unequal cash flows occurring at equal intervals of time forever. D: unequal cash flows occurring at equal intervals of time for a specific number of periods.
- Present value is defined as A: future cash flows discounted to the present by an appropriate discount rate. B: inverse of future cash flows. C: present cash flows compounded into the future. D: future cash flows multiplied by the factor[img=59x27]18030eb8dae724e.png[/img].