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As the compounding rate becomes lower and lower the future value of inflows approaches?
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If the compounding rate becomes lower and lower the future value of inflows approaches .?
the present value of the inflows
Does the future value of an investment increases as the number of years of compounding at a positive rate of interest declines?
No, the future value of an investment does not increase as the number of years of compounding at a positive rate of interest declines. The future value is directly proportional to the number of compounding periods, so as the number of years of compounding decreases, the future value of the investment will also decrease.
Get cash when you need it?
an asset could be valued at the present value of its future inflows
If an investor had to choose between daily monthly or quarterly compounding which would you choose?
The greater the number of compounding periods, the larger the future value. The investor should choose daily compounding over monthly or quarterly.
More frequent compounding results in higher future values and lower present values than less frequent compounding at the same interest rate?
Yes
When there is only one compounding period in a ordinary annuity the table factor for future value is always 1?
True
What is the difference between compounding and discounting?
Compounding finds the future value of a present value using a compound interest rate. Discounting finds the present value of some future value, using a discount rate. They are inverse relationships. This is perhaps best illustrated by demonstrating that a present value of some future sum is the amount which, if compounded using the same interest rate and time period, results in a future value of the very same amount.
What is the future value of 1200 a year for 40 years at 8 percent interest?
What is the future value of $1,200 a year for 40 years at 8 percent interest? Assume annual compounding.
What is the future value of 10000 for an interest rate of 16 percent and 1 annual period of compounding?
With only one year the value is 11600
Will we make future cars?
Every year car manufacturers release future cars. Every day the present becomes past and the future becomes present. Makes you think doesn't it.
Why is accrual basis accounting acceptable for most business enterprises?
An accounting method that measures the performance and position of a company by recognizing economic events regardless if there is cash transaction. The method allows the current cash inflows/outflows to be combined with future expected cash inflows/outflows to give a more accurate picture of a company's current financial state.
What is conventional projects?
A project with a negative initial cash flow(cash out flow),which is expected to followed by one or more future positive cash flows(cash inflows) is called conventional project.
