Exam (elaborations)
Basic Finance for Managers
- Module
- Financial Management
- Institution
- London School Of Business And Finance
Basic Finance for Managers
[Show more]
Seller
Follow
Content preview
BUSN 5200: Chapter 4 Practice Quiz - Time Value of Money 1: Analyzing Single Cash Flows1. Which of the following is NOT true when developing a time line?
a. Cash inflows are designated with a positive number.
b. Cash outflows are designated with a positive number.
c. The cost is known as the interest rate.
d. The time line shows the magnitude of cash flows at different points in time.
2. People borrow money because they expect
a. their purchases to give them the satisfaction in the future that compensates them for
the interest payments charged on the loan.
b. the time value of money to apply only if they are saving money.
c. interest rates to rise.
d. that consumers don't need to calculate the impact of interest on their purchases.
3. How are future values affected by changes in interest rates?
a. The lower the interest rate, the larger the future value will be.
b. The higher the interest rate, the larger the future value will be.
c. Future values are not affected by changes in interest rates.
d. One would need to know the present value in order to determine the impact.
4. How are present values affected by changes in interest rates?
a. The lower the interest rate, the larger the present valve will be.
b. The higher the interest rate, the larger the present valve will be.
c. Present values are not affected by changes in interest rates.
d. One would need to know the future value in order to determine the impact.
5. We call the process of earning interest on both the original deposit and on the earlier interest
payments
a. discounting
b. multiplying
c. compounding
d. computing
6. The process of figuring out how much an amount that you expect to receive in the future is
worth today is called
a. discounting
b. multiplying
c. compounding
d. computing
7. The interest rate, i, which we use to calculate present value, is often referred to as the
a. discount rate
b. multiplier
c. compound rate
d. dividend
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller madzmlbybs. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £8.60. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
52928 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now