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What is the difference between future value and present value? Which approach is generally preferred by financial managers? Why? Define and differentiate among the three
- What is the difference between future value and present value? Which approach is generally preferred by financial managers? Why?
- Define and differentiate among the three basic patterns of cash flow: (1) single amount, (2) an annuity, and (3) a mixed stream.
- How is the compounding process related to the payment of interest on savings? What is the general equation for future value?
- What effect would a decrease in the interest rate have on the future value of a deposit? What effect would an increase in the holding period have on future value?
- What is meant by the present value of a future amount? What is the general equation for present value?
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