Discounting - Study guides, Class notes & Summaries

What is the time value of money Ans- refers to the observation that it is better to receive money sooner than later Future Value Versus Present Value Ans- Future value is compounding, present value is discounting Future Value of a Single Amount Ans- the value in future dollars of some cash flow today The Equation for Future Value Ans- FV=PV(1+r)^n -FV(n)= future value or payoff after n periods -PV(0)= initial principal or present value -r= per period compound rate of interest -n= nu...

California Insurance Exam Questions and Answers 100% Solved Two methods of determining insurance need: - Human Life Approach Needs Approach Human Life Value Approach~ - One of two ways of calculating insurance need. By discounting estimated future income Calculating the amount of life insurance a family will need based on the financial loss that they will suffer if the insured person were to pass away today 10X salary Based on age, gender, planned retirement age, occupation, annual wag...

Annuities CEWhich of the following is a purpose of the annuity? A. The replacement of earnings upon the disability of an individual B. The distribution of a lifetime income C. The discounting of a principal sum back to its present value D. The creation of a fund at the earth of an individual - correct answer B Why: the purpose of an annuity is the distribution of a lifetime income Annuity purchasers transfer to an insurance company their risk of A. Outliving their financial resour...

Projects that are calculated as having negative NPVs should be o :## rejected or abandoned If adoption of a new product decreases the sales of an old product, what happens? o :## incremental benefits of the new product may be overestimated a cost should be considered sunk when it o :## has no effect on future cash flows originally costs $75,000, book value of $20,000, worth $25,000. What is the opportunity cost? o :## $25,000 the likely effect of discounting nominal ash flows with real...

California Insurance Exam Questions And Answers Two methods of determining insurance need: - Human Life Approach - Needs Approach Human Life Value Approach~ - One of two ways of calculating insurance need. - By discounting estimated future income - Calculating the amount of life insurance a family will need based on the financial loss that they will suffer if the insured person were to pass away today - 10X salary - Based on age, gender, planned retirement age, occupation, annual wa...

Two methods of determining insurance need: - Human Life Approach - Needs Approach Human Life Value Approach~ - One of two ways of calculating insurance need. - By discounting estimated future income - Calculating the amount of life insurance a family will need based on the financial loss that they will suffer if the insured person were to pass away today - 10X salary - Based on age, gender, planned retirement age, occupation, annual wage, employment benefits, as well as the personal...

TB_Baron_Chapter 3 Key: Answer, Page, Type, Learning Objective, Level Type A=Applied C=Conceptual F=Factual Level (1)=Easy; (2)=Moderate; (3)=Difficult LO=Learning Objective SG=Used in Study Guide p=page TB_Baron_Chapter 3 Multiple Choice Single Select M/C Question 1 Many times, attempts at deception are thwarted because of ________ facial expressions. a) irrepressible b) basic channel c) stereotypical d) irrelevant ANS: a Skill=Understand, Objective...

Adventis Financial Modeling Certification (FMC) Level 2 Exam Prep (New 2023/ 2024 Update) Questions and Verified Answers_ 100% Correct QUESTION why is tax-effected EBIT used rather than net income Answer: - the valuation should not depend on capital structure - applying the tax-rate directly to EBIT without subtracting interest expense eliminates the impact of capital structure to cash flow QUESTION cash flow is projected out in the projection period which is typical...

Utah Real Estate General Sales UPDATED Exam Questions and CORRECT Answers Bob the buyer has made an offer on Sam the seller's property. That offer has been accepted. Bob is working on finalizing his loan for the purchase as part of the contingencies of the agreement. What kind of agreement exists between Bob and Sam? (a) Executed (b) Sale pending (c) Executory (d) Voidable - CORRECT ANSWER- (c) Executory J carried back a 2nd mortgage when his home was sold. Now he needs some ready...

Two methods of determining insurance need: - Answer - Human Life Approach - Needs Approach Human Life Value Approach~ - Answer - One of two ways of calculating insurance need. - By discounting estimated future income - Calculating the amount of life insurance a family will need based on the financial loss that they will suffer if the insured person were to pass away today - 10X salary - Based on age, gender, planned retirement age, occupation, annual wage, employment benefits, as we...