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Unformatted text preview: For a uniform series of monthly cash flows that begins at the end of five years (i.e., month 60), the P/A factor will yield a P value at the end of year four (i.e. month 48). FALSE For a uniform series that starts at the end of the year two and stops at the end of year eight, the ( F/A , i%, 7) factor will yield an F value at the end of year nine. FALSE If you multiply the A/P, P/G , and F/A factors together, you will obtain the value for the F/G factor. TRUE For cash flows of $2,500 in month 15, $3,000 in month 16, and amounts increasing by $500 through month 25, the n value to use in the P/G factor is 10. FALSE For a shifted gradient that begins in year four and ends in year 12, the factor ( A/G , i%, 12) will yield an A value in years 1 through 12. FALSE A nominal interest rate always has a compounding period equal to or less than a year. FALSE When deposits are made into an account between compounding periods, those deposits do not begin to accrue interest until the next interest period begins. TRUE If the compounding period is not stated for a particular interest rate, it is assumed to be equal to the period over which the interest...
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- Spring '10
- Net Present Value, $2,500