Test Bank Financial & Managerial Accounting, 20th Edition 20e by Jan Williams, Mark Bettner.

Appendix B 1) Future value is the amount that must be invested today at a specific interest rate to receive a particular amount at some future date. ⊚ true ⊚ false 2) The present value of an ordinary annuity is the amount that must be invested today at a specific interest rate to in order to receive a particular amount at the end of a specified number of future periods. ⊚ true ⊚ false 3) The future value of an investment gradually increases toward its present value amount. ⊚ true ⊚ false 4) Compound interest assumes that the interest earned on a particular investment is reinvested. ⊚ true ⊚ false 5) Discounting a future value amount will determine its present value amount. ⊚ true ⊚ false 6) The lower the discount rate of an investment, the lower the present value of the investment. ⊚ true ⊚ false 7) Annuities provide a series of cash flows to investors at regular intervals for a specified period of time. ⊚ true ⊚ false T