1)A financial asset is:

• the firm's ownership in an asset.
• equity only.
• a real asset.
• a claim against the firm for future expected cash flows.

2)The values found in the present value and compound value tables are called:

• discount rates.
• annuities.
• interest factors.
• interest rates.

3)A dollar today is worth more than a dollar to be received in the future because:

• inflation will reduce purchasing power of a future dollar.
• risk of nonpayment in the future.
• the dollar can be invested today and earn interest.
• a dollar today is not worth more than a dollar to be received in the future.