Quiz Ch 05 – T/F Annual Cash Flows and Time Line Relevance
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition
True or false: A time line retains its significance even when not all cash flows take place annually.
True or false: A time line retains its significance even when not all cash flows take place annually.
True or false: Time lines can be formulated when cash flows transpire annually as well as quarterly.
True or false: Initiating retirement investments early diminishes the benefits of compound interest.
True or false: Commencing retirement investments early amplifies the advantages of compound interest.
True or false: With quarterly compounding of savings accounts, the effective annual rate will be greater than the nominal rate.
True or false: With a positive interest rate, the future value of an expected series of payments will always be higher than the present value of the same series.
True or false: A time line remains meaningful even when not all cash flows transpire annually.
True or false: When a bank compounds savings accounts quarterly, the nominal rate will surpass the effective annual rate.
True or false: With a positive discount (or interest) rate, the present value of an anticipated series of payments will invariably surpass the future value of the same series.
True or false: Time lines can be devised for annuities with payments occurring at either the beginning or end of periods.