Answer Term Discounting . Time value of money B. Amortized loan c. Ordinary annuity D. Annual percentage rate E. Description A rate that represents the return on an investor's best available alternative investment of equal risk A cash flow stream that is generated by a share of preferred stock that is expected to pay dividends every quarter indefinitely A concept that maintains that the owner of a cash flow will value it differently, depending on when it occurs. An interest rate that reflects the return required by a tender and paid by a borrower, expressed as a percentage of the principal borrowed. A process that involves calculating the current value of a future cash flow or series of cash flows based on a certain interest rate. A series of equal cash flows that occur at the end of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on). A cash flow stream that is created by a lease that requires the payment to be paid on the first of each month and a lease period of three years. The name given to the amount to which a cash flow, or a series of cash flows, will grow over a given period of time when compounded at a given rate of interest A loan in which the payments include interest as well as loan principal A schedule or table that reports the amount of principal and the amount of interest that make up each payment made to repay a loan by the end of its regular term. 1 Annuity due F G Perpetuity Future value H. Amortization schedule 1. J. Opportunity cost of funds Time value of money calculations can be solved using a mathematical equation, a financial calculator, or a spreadsheet. Which of the following equations can be used to solve for the present value of an ordinary annuity? PMT/ O PMT X {1 - [1/(1 + r)"]}/ PMT x {[(1 + r)" - 11/r} O PMT x {[(1 + r)" - 13/r) x (1 + r)