UVU MGMT 4860 BUSINESS SENIOR EXAM SPRING 2026/2027 STUDY GUIDE | CAPSTONE
PRACTICE QUESTIONS AND ANSWERS | COMPLETE REVIEW
Net Present Value - correct answer ✔✔NPV = Today's value of the expected cash flows − Today's
value of invested cash.
Expected Returns - correct answer ✔✔the return on a risky asset expected in the future.
Expected return = (return A x probability A) + (return B x probability B).
Rate of Returns - correct answer ✔✔The rate of return is the conversion between the present
value of something from its original value converted into a percentage.
Formula: The current or present value minus the original value divided by the initial value, times
100.
Time Value of Money - correct answer ✔✔Money's potential to grow in value over time. The
relationship between time, money, a rate of return, and earnings growth.
The concept that a sum of money is worth more now than the same sum will be at a future date
due to its earnings potential. The reason this occurs is because of inflation, risk, and liquidity.
Time Value of Money Formula - correct answer ✔✔FV = PV x (1 + [Rate of Interest/No. of
compounding periods of interest each year])^ No. of compounding periods of interest each year
x # of years
OR
PRACTICE QUESTIONS AND ANSWERS | COMPLETE REVIEW
Net Present Value - correct answer ✔✔NPV = Today's value of the expected cash flows − Today's
value of invested cash.
Expected Returns - correct answer ✔✔the return on a risky asset expected in the future.
Expected return = (return A x probability A) + (return B x probability B).
Rate of Returns - correct answer ✔✔The rate of return is the conversion between the present
value of something from its original value converted into a percentage.
Formula: The current or present value minus the original value divided by the initial value, times
100.
Time Value of Money - correct answer ✔✔Money's potential to grow in value over time. The
relationship between time, money, a rate of return, and earnings growth.
The concept that a sum of money is worth more now than the same sum will be at a future date
due to its earnings potential. The reason this occurs is because of inflation, risk, and liquidity.
Time Value of Money Formula - correct answer ✔✔FV = PV x (1 + [Rate of Interest/No. of
compounding periods of interest each year])^ No. of compounding periods of interest each year
x # of years
OR
