The basic concept involved in time value of money calculations is that revenue must be earned in
Question:
The basic concept involved in time value of money calculations is that
revenue must be earned in order for net income to be generated.
you get what you measure.
incremental revenues must exceed incremental costs.
it is better to receive a dollar today than to receive a dollar in the future.
What is the sum of the present values of all cash flows (inflows and outflows) called?
Net present value
Internal rate of return
Required rate of return
The cash inflows expected during a project’s life are equal in amount. In determining the internal rate of return, how is the present value factor calculated?
By looking in the present value of an annuity table for the number of years and the respective discount rate.
By dividing the present value of the annuity by the initial outlay.
By dividing the initial outlay by the annuity amount.
By multiplying the annuity amount by the number of years it occurs.
Cost of capital
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson