Question

When we express the value of a cash flow or series of cash flows in terms of dollars today, we call it the ________ of the investment. If we express it in terms of dollars in the future, we call it the ________. Group of answer choices present value; future value future value; present value ordinary annuity; annuity due discount factor; discount rate

Answer 1

Answer:

present value; future value

Explanation:

When we express the value of a cash flow or series of cash flows in terms of dollars today, we call it the present value of the investment. This is achieved by discount the future cash flows using the appropriate discounting rate to show the effect of time value of money.

Then, If we express it in terms of dollars in the future, we call it the future value. This is achieved by Compounding the Principle or Present Value using the appropriate compounding rate to show the effect of time value of money