1. A dollar today is worth more than dollar tomorrow

   • False
   • True

2. _____________ is the process by which future cash flows are adjusted to some equivalent amount today.

   • Discounting
   • Managerial accounting
   • Discount rate
   • Liquidity ratio

3. You invest $100 today and earn four percent each year on that investment after taxes. How much money will you have at the end of the second year?

   • $100
   • $104
   • $108.16
   • $112.49

4. The value of money at a specific date in the future.

   • Current ratio
   • Present value
   • Future value
   • Liquidity ratio

5. The idea that you earn returns not just on your original investment, but on any return that investment has previously generated is known as compounding.

   • True
   • False

6. ___________ represents the value of a future cash flow we expect to receive in todays dollars.

   • Current ratio
   • Present value
   • Past value
   • Future value

7. You have an investment that will provide cash flows or returns over time, but instead of those cash flows or returns remaining constant, you expect them to be different per year. This is known as a _____________.

   • perpetuity
   • price elasticity
   • present value
   • mixed cash stream