A. Discounting
B. Compounding
C. Factorization
D. None of the given options

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Future value is discounted back at the given interest rate to find out the current worth of the amount to be received in future..

Related Mcqs:

  1. Process of calculating future value of money from present value is classified as____________?
    A. Compounding B. Discounting C. Money value D. Stock value...
  2. The coupon payment accrued between last payment and settlement date is classified as __________?
    A. paid interest B. unpaid interest C. zero interest D. accrued interest...
  3. The treasury security in which the final principal payment is separated from periodic interest payment is classified as ___________?
    A. STRIP B. separated security C. inflated security D. coupon paid security...
  4. In alternative investments, the constant cash flow stream is equal to initial cash flow stream in the approach which is classified as __________?
    A. greater annual annuity method B. equivalent annual annuity C. lesser annual annuity method D. zero annual annuity method...
  5. A discount rate which is equal to the present value of TV to the project cost present value is classified as _________?
    A. negative internal rate of return B. modified internal rate of return C. existed internal rate of return D. relative rate of return...
  6. Present value of future cash flows is divided by an initial cost of project to calculate_______?
    A. Negative index B. Exchange index C. Project index D. Profitability index...
  7. The present value of future cash flows is $2000 and an initial cost is $1100 then the profitability index will be ___________?
    A. 0.55 B. 1.82 C. 0.55 D. 0.0182...
  8. The present value of future cash flows is divided by an initial cost of the project to calculate __________?
    A. negative index B. exchange index C. project index D. profitability index...
  9. The present value of future cash flows is $4150 and an initial cost is $1300 then the profitability index will be ____________?
    A. 0.0319 B. 3.19 C. 0.31 times D. 5450...
  10. In estimating value of cash flows, compounded future value is classified as its__________?
    A. Terminal value B. Existed value C. Quit value D. Relative value...
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The correct answer to the question: "The process of determining the present value of a payment or a stream of payments that is to be received in the future is known as:" is "Discounting".