Chapter 6
1. Accounting topics where present valuebased accounting measurements are
relevant include all of the following except:
A. leases.
B. longterm assets.
C. environmental liabilities.
D. stockholders' equity.
2. Which of the following is not a component of an interest rate?
A. Pure rate.
B. Credit risk rate.
C. Opportunity cost rate.
D. Expected inflation rate.
3. Interest that is computed on principal and any interest earned that has not
been paid or withdrawn is:
A. simple interest.
B. prime interest.
C. compound interest.
D. present value interest.
4. The table that would show the smallest value for 5 periods at 8% is the:
A. future value of 1 table.
B. present value of 1 table.
C. present value of an ordinary annuity table.
D. present value of an annuity due table.
5. The amounts to which periodic rents of 1 will accumulate if the payments are
invested at the end of each period are contained in the
:
A. future value of 1 table.
B. future value of an ordinary annuity of 1 table.
C. present value of an ordinary annuity of 1 table.
D. present value of an annuity due of 1 table.
6. The amounts that must be deposited now to permit withdrawals of 1 at the
beginning of each period are contained in the:
A. present value of 1 table.
B. future value of an ordinary annuity of 1 table.
C. present value of an ordinary annuity of 1 table.
D. present value of an annuity due of 1 table.
7. All of the following variables are fundamental to solving interest problems
except the:
A. future value.
B. present value.
C. number of time periods.
D. All of the options are fundamental variables.
8. The process of discounting involves determining:
A. future value.
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View Full DocumentB. present value.
C. future value or present value.
D. the number of time periods.
9. In order to determine how much to deposit now to have $10,000, 5 years from
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 Spring '11
 Proscott
 Accounting, Time Value Of Money

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