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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ACF Table
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PVF Table
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All of the Above
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Detailed explanation-1: -Also referred to as a “present value table, ” an annuity table contains the present value interest factor of an annuity (PVIFA), which you then multiply by your recurring payment amount to get the present value of your annuity.
Detailed explanation-2: -What is a Present Value of 1 Table? A present value of 1 table states the present value discount rates that are used for various combinations of interest rates and time periods. A discount rate selected from this table is then multiplied by a cash sum to be received at a future date, to arrive at its present value.
Detailed explanation-3: -Value for calculating the present value is PV = FV* [1/ (1 + i)^n]. Here i is the discount rate, and n is the period. Note that the PV table represents the part of the PV formula in bold above [1/ (1 + i)^n]. Many also call it a present value factor.
Detailed explanation-4: -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.