BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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CF Table
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PVF Table
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PVAF Table
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None of the Above
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Detailed explanation-1: -An annuity table represents a method for determining the future value of an annuity. The annuity table contains a factor specific to the future value of a series of payments, when a certain interest earnings rate is assumed.
Detailed explanation-2: -future value interest factor or FVIF is used to calculate the future value of an amount of its present value. The future value factor is found on a table which is used to simplify calculations for amounts greater than one dollar. The future value factor formula is based on the concept of time value of money.
Detailed explanation-3: -Fn = P(1+i)n The term (1+i)n is known as the compound value factor of lump-sum 1. It is always greater than 1 for positive i which means that CVF goes up with increasing i and n. Note − the compound value of a lump-sum goes up with time.
Detailed explanation-4: -PV = CF / (1 + r) t Where, PV = Present Value. CF = Future Cash Flow. r = Discount Rate.