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Elza [17]
1 year ago
12

The process of determining the present value of future cash flows in order to know their worth today is referred to as:______.

Business
1 answer:
RoseWind [281]1 year ago
3 0

Calculating the present value of a cash flow or series of cash flows that will be received in the future is the process of discounting.

A value obtained in the future is converted to an equivalent value received right away through the process of discounting. Discounting determines this relative value, so a dollar received in 50 years may be worth less than a dollar received today. Using the aforementioned method, the discounting process assists an investor in estimating the investment's value in current dollars at the investor's desired rate of return. Due to the opportunity cost of spending money now and the desire to enjoy advantages now rather than in the future, discounting makes current costs and benefits more valuable than those that will occur in the future. A discount factor in financial modeling is a decimal number multiplied by a cash flow value to reduce it to its present value. As the effect of compounding the discount rate accumulates over time, the factor grows (i.e., the decimal value shrinks).

Know more about discounting:

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Answer:

C) services.

Explanation:

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6 0
3 years ago
Darlene is getting an FHA-insured loan to purchase a house. The purchase price is $278,000, and she’s paying 3.5% down. She will
omeli [17]

Answer:

96.5%

Explanation:

Data provided in the question:

Purchase price i.e the value = $278,000

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Upfront mortgage insurance premium = $4,865

Now,

Amount of down payment = 3.5% of loan value

= 0.035 × $278,000

= $9,730

Therefore,

The loan value = value - Amount of down payment

= $278,000 -  $9,730

= $268,270

Thus,

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4 0
2 years ago
The first step that any organization should take to manage the risk of employee communication is to develop and publicize​ a(n)
Y_Kistochka [10]
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8 0
3 years ago
Chris Co. produces sports equipment and is currently producing 1,000 mini long boards annually. A supplier has offered to produc
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Answer: $305

Explanation:

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= $280 + $25

= $305

6 0
3 years ago
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