25. The method of converting the amount of future cash into an amount of cash and cash equivalents value in present is known as: a. Annuity b. None of these C. Discounting d. Compounding
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- 7. Conceptually all liabilities should be reported on the balance sheet at a. the present value of the future outlays they require b. their maturity value c. face amount d. their current cash equivalent amountTRUE OR FALSE 6. Amortized cost liabilities are subsequently measured at the present value of the cash outflows from the instrument.Direction: Define, draw the cash flow diagram, and write the general formula of the following: ANNUITY 1. Ordinary Annuity a) Sum/Future of Ordinary Annuity b) Present Worth of Ordinary Annuity 2. Annuity Due 3. Deferred Annuity
- Th e three major classifi cations of activities in a cash fl ow statement are: A . infl ows, outfl ows, and net fl ows.4. Futurevalue of annuities II There are three categories of cash flows: single cash flows, also referred to as “lump sums,” a stream of unequal cash flows, and annuities. Based on your understanding of annuities, answer the following questions. Which of the following statements about annuities are true? Check all that apply. An annuity due earns more interest than an ordinary annuity of equal time. An annuity due is an annuity that makes a payment at the end of each period for a certain time period. Ordinary annuities make fixed payments at the end of each period for a certain time period. A perpetuity is a constant, infinite stream of equal cash flows that can be thought of as an infinite annuity. Which of the following is an example of an annuity? A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of time An investment in a certificate of deposit (CD) Becky has a large and growing…Define the term reinvestment rate and describe how it differs for any cash flow series between (1) a PW value calculated at the MARR, and (2) the IROR value i*.
- Determining the future value of one or more present day cash flows is known as ________. A. disinvesting B. annuitizing C. discounting D. compoundingnarubhai19 What does the current ratio measure? Multiple Choice The relative proportion of current versus noncurrent assets Whether current assets are sufficient to pay current liabilities The speed which current assets can be converted to cash Whether cash is sufficient to pay current liabilities
- 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.1. _______________ is the process of determining the future value (FV) of a cash flow or a series of cash flows, while _________________ is the process of finding the present value (PV) of a future cash flow or series of cash flows. A. Calculating, accounting. B. Discounting, compounding. C. Compounding, forwarding. D. Compounding, discounting.A fixed stream of cash flows occurring at the beginning of each period for a fixed period of time is known as: Select one: a. Ordinary annuity b. Constant annuity c. Annuity due d. Financial annuity
