Discounting - Study guides, Class notes & Summaries

Annuities CE UPDATED ACTUAL Questions and CORRECT Answers Which 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

Annuities CE UPDATED Actual Questions and CORRECT Answers Which 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

Property Tax is included in which of the following? Correct Answer- As part of the data analysis step in the appraisal process, it is necessary to consider the highest and best use of the property in question. In regards to determining the highest and best use, all of the following are true except: Correct Answer- Direct capitalization applies multipliers and rates to: Correct Answer-First year Income Which of the following is NOT an example of the use of direct capitalization? Correct ...

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...

Intermediate Accounting Exam 2 Review UPDATED Exam Questions and CORRECT Answers ONLY True or false: An annuity due is the same as an ordinary annuity. - Correct Answer- False In an annuity due, the payment occurs at the beginning of the period. In an ordinary annuity, the payment occurs at the end of the period. In a deferred annuity, a two-step process can be used to calculate the present value of the annuity. The first step requires the calculation of the present value of the annuit...

Texas Principles of Real Estate - Part 2 Exam Questions and Answers . Terms like: The liquidation of a financial obligation on an installment basis is referred to as...? Buy-down Discounting Amortization None of the above - Answer: Amortization

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...

5 basic assertions of accounting - Answer--complete, valuation, existence, ownership, classification, described and disclosed Required accounting criteria from a set of rules or requirements: - Answer--understandability, relevance, reliability, comparability/consistency, lack of bias, and cost-benefit effectiveness Understandability Criteria - Answer--Must be transparent, intelligible, and clearly disclosed Relevance Criteria - Answer--Must be timely, have predictive value, provide useful f...

Activity-Based costing (ABC) Ans: A method of cost accounting designed to identify streams of activity and then to allocate costs across particular business processes according to the mount of time employees devote to particular activities Adapters Ans: Companies that take the current industry structure and its evolution as givens, and choose where to compete. Adverse impact Ans: When a seemingly neutral employment practice has a disproportionately negative effect on a protected group. Ad...

California Insurance Exam/ 516 Questions with Definitive Solutions. Terms like: 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, g...