D076 Finance Skills for Managers Terms
and questions for module 5
Ordinary annuities - ✔✔✔a series of equal payments made at the end of consecutive periods over a
fixed length of time
Annuities due - ✔✔✔a series of equal payments made at the beginning of consecutive periods
Perpetuities - ✔✔✔a constant stream of identical cash flows that continues forever
Compounding - ✔✔✔finding a future value given a present value
Discounting - ✔✔✔finding a present value given a future value.
Time value of money - ✔✔✔the idea that money that is available at the present time is worth more
than the same amount in the future
Annuities - ✔✔✔equally spaced cash flows of equal amounts.
Lolo invested $30,000 today in an account that gives 3% interest. Starting one year from today, she will
be able to pull out little over $3,500 a year. What does the $30,000 represent? - ✔✔✔Present value
Twenty years ago, Mateo started an investment account with $2,000. He then invested $100 into the
account every month at the end of each month. Today, he has $46,528 in the same account. What is the
term for the $100 monthly cash flows? - ✔✔✔Annuity
negative, positive - ✔✔✔When doing TVM calculations in Excel, it is important to make sure that cash
outflows are indicated with a ________ value and cash inflows are indicated with a ________ value.
and questions for module 5
Ordinary annuities - ✔✔✔a series of equal payments made at the end of consecutive periods over a
fixed length of time
Annuities due - ✔✔✔a series of equal payments made at the beginning of consecutive periods
Perpetuities - ✔✔✔a constant stream of identical cash flows that continues forever
Compounding - ✔✔✔finding a future value given a present value
Discounting - ✔✔✔finding a present value given a future value.
Time value of money - ✔✔✔the idea that money that is available at the present time is worth more
than the same amount in the future
Annuities - ✔✔✔equally spaced cash flows of equal amounts.
Lolo invested $30,000 today in an account that gives 3% interest. Starting one year from today, she will
be able to pull out little over $3,500 a year. What does the $30,000 represent? - ✔✔✔Present value
Twenty years ago, Mateo started an investment account with $2,000. He then invested $100 into the
account every month at the end of each month. Today, he has $46,528 in the same account. What is the
term for the $100 monthly cash flows? - ✔✔✔Annuity
negative, positive - ✔✔✔When doing TVM calculations in Excel, it is important to make sure that cash
outflows are indicated with a ________ value and cash inflows are indicated with a ________ value.
