Chapter 5 Questions

By Michael McMinassian

1.This process determines the Present Value of an income stream by applying appropriate time value of money concepts?a.) Discounting

b.) Compounding

c.) Time Value

d.) IRR

2. This process is determining the Future Value of an income stream by applying appropriate time value of money concepts?

a.) Discounting

b.) Compounding

c.) Time Value

d.) NPV

3. This concept is developed around the arrangement that capital is entitled a return>

a.) Time Value Of Money

b.) Net Present Value

c.) Internal Rate Of Return

d.) Amortization

4.) An annuity is a specific type of income stream that has equal periods of payments. True or False.

5.) A mortgagor is a real estate. True or False.

6.) Return on refers to the portion of investment cash in flow designated as the interest earned on invested capital. True or False.

7.) An amortization schedule shows all payments made over the life of a loan. True or False.

8.) The IRR is the rate of return that exactly equates the investment outflows with the investment inflows. True or False.

KEY:

1.) a.

2.) b.

3.) a.

4.) t.

5.) f.

6.) t.

7.) t.

8.) t.