ACG 4101 Exam 2 Chapters 5-7 |
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1-5a) What is the Time Value of Money concept? - Answer✅✅The same amount of
money today is worth more than the same amount of money in the future.
1-5b) What is the Time Value of Money concept? - Answer✅✅The same amount of
money in the future is worth less than the same amount of money today.
1-5c) What is the formula for the Time Value of Money? - Answer✅✅Future Value -
Present Value
1-5d) What is Future Value? - Answer✅✅The amount of money that a dollar will
grow to at some point in the future.
1-5e) What is the formula for Future Value? - Answer✅✅PV * (1+r)^n
1-5f) What is Present Value? - Answer✅✅Today's value of a future amount of
money.
1-5g) What is the formula for Present Value? - Answer✅✅FV / (1+r)^n
1-5h) How do you use a FV or PV table to calculate the value? - Answer✅✅Find the
correct table value based on the number of periods and the interest rate.
,Then multiply that table value by the amount of money.
1-5i) What is the difference between Lump Sum and Annuity? - Answer✅✅A lump
sum is a single amount of money.
An annuity is a recurring amount of money.
1-5j) What is Compounding Interest? - Answer✅✅A value of money generates
interest on principal and on the accumulated earned interest.
1-5k) Why is the Interest Rate and Effective Interest Rate different? -
Answer✅✅Different because of the power of Compounding Interest.
1-5l) What is the Interest Rate? - Answer✅✅The stated rate that interest will be
calculated at.
1-5m) What is the Effective Interest Rate? - Answer✅✅The rate at which money
will actually grow during a full year.
1-5n) What is the Simple Interest formula? - Answer✅✅Interest = Principal * Rate *
Time
i=prt
1-5o) What is the Effective Interest Rate formula? - Answer✅✅(1+r)^n = FV/PV
6-8a) What does FVAD stand for? - Answer✅✅Future Value of Annuity Due
6-8b) What does FVA stand for - Answer✅✅Future Value of Ordinary Annuity
6-8c) What does PVAD stand for? - Answer✅✅Present Value of Annuity Due
6-8d) What does PVA stand for? - Answer✅✅Present Value of Ordinary Annuity
6-8e) What is Ordinary Annuity? - Answer✅✅Assumes that the cash payments are
being made at the END of each period.
6-8f) What is Annuity Due? - Answer✅✅Assumes that the cash payments are being
made at the BEGINNING of each period.
6-8g) What is Deferred Annuity? - Answer✅✅When an annuity is deferred,
payments begin AFTER a delay.
6-8h) How do we calculate Annuity Due using an Ordinary Annuity value? -
Answer✅✅PVAD = PVA * (1+i)
FVAD = FVA * (1+i)
, 6-8i) How does compounding frequency affect the future value of an investment? -
Answer✅✅The higher the frequency, the higher the future value do to the power of
compounding interest.
6-8j) How do we determine the number of years needed to accumulate a set
amount? - Answer✅✅By solving for n in the FV formula: FV = PV * (1+r)^n
6-8k) What is the FVA Factor formula? - Answer✅✅[(1+r)^n - 1] / r
6-8l) What is the PVA Factor formula? - Answer✅✅{1 - [(1+r)^-n]} / r
9-14a) What are Quality-Assurance ("Standard Type") Warranties? -
Answer✅✅Obligations to repair/replace products that are defective upon delivery.
9-14b) What are Extended ("Service Type") Warranties? - Answer✅✅Provides
protections beyond the Quality Assurance Warranty.
9-14c) Are Quality-Assurance Warranties a performance obligation? -
Answer✅✅No. This warranty is considered a cost of performing the original
obligation of providing quality products.
9-14c) Are Extended Warranties a performance obligation? - Answer✅✅Yes. This
warranty is a performance obligation.
9-14d) When is a warranty an Extended Warranty? - Answer✅✅A) The customer
has the option to purchase the warranty separately.
B) The warranty goes beyond assuring the product/service was defect-free upon
delivery. (example, very long).
9-14e) When is revenue recognized for Quality-Assurance Warranties? -
Answer✅✅At the point of sale, because it is a performance obligation for the
original transaction.
9-14f) When is revenue recognized for Extended Warranties? - Answer✅✅Over
time throughout the coverage period, because it is its own performance obligation
for a prolonged amount of time.
9-14g) What is another name for Quality-Assurance Warranties? -
Answer✅✅Another name for it is Standard-Type Warranties.
9-14h) What is another name for Extended Warranties? - Answer✅✅Another name
for it is Service-Type Warranties.
9-14i) What are bundled goods/services? - Answer✅✅When the customer has the
option to include additional goods/services at a discounted/included price.
Brand New Expert Exam Questions
with Correct Verified Answers| All
Graded A+|100% Guaranteed
Success| Latest Premium Update.
1-5a) What is the Time Value of Money concept? - Answer✅✅The same amount of
money today is worth more than the same amount of money in the future.
1-5b) What is the Time Value of Money concept? - Answer✅✅The same amount of
money in the future is worth less than the same amount of money today.
1-5c) What is the formula for the Time Value of Money? - Answer✅✅Future Value -
Present Value
1-5d) What is Future Value? - Answer✅✅The amount of money that a dollar will
grow to at some point in the future.
1-5e) What is the formula for Future Value? - Answer✅✅PV * (1+r)^n
1-5f) What is Present Value? - Answer✅✅Today's value of a future amount of
money.
1-5g) What is the formula for Present Value? - Answer✅✅FV / (1+r)^n
1-5h) How do you use a FV or PV table to calculate the value? - Answer✅✅Find the
correct table value based on the number of periods and the interest rate.
,Then multiply that table value by the amount of money.
1-5i) What is the difference between Lump Sum and Annuity? - Answer✅✅A lump
sum is a single amount of money.
An annuity is a recurring amount of money.
1-5j) What is Compounding Interest? - Answer✅✅A value of money generates
interest on principal and on the accumulated earned interest.
1-5k) Why is the Interest Rate and Effective Interest Rate different? -
Answer✅✅Different because of the power of Compounding Interest.
1-5l) What is the Interest Rate? - Answer✅✅The stated rate that interest will be
calculated at.
1-5m) What is the Effective Interest Rate? - Answer✅✅The rate at which money
will actually grow during a full year.
1-5n) What is the Simple Interest formula? - Answer✅✅Interest = Principal * Rate *
Time
i=prt
1-5o) What is the Effective Interest Rate formula? - Answer✅✅(1+r)^n = FV/PV
6-8a) What does FVAD stand for? - Answer✅✅Future Value of Annuity Due
6-8b) What does FVA stand for - Answer✅✅Future Value of Ordinary Annuity
6-8c) What does PVAD stand for? - Answer✅✅Present Value of Annuity Due
6-8d) What does PVA stand for? - Answer✅✅Present Value of Ordinary Annuity
6-8e) What is Ordinary Annuity? - Answer✅✅Assumes that the cash payments are
being made at the END of each period.
6-8f) What is Annuity Due? - Answer✅✅Assumes that the cash payments are being
made at the BEGINNING of each period.
6-8g) What is Deferred Annuity? - Answer✅✅When an annuity is deferred,
payments begin AFTER a delay.
6-8h) How do we calculate Annuity Due using an Ordinary Annuity value? -
Answer✅✅PVAD = PVA * (1+i)
FVAD = FVA * (1+i)
, 6-8i) How does compounding frequency affect the future value of an investment? -
Answer✅✅The higher the frequency, the higher the future value do to the power of
compounding interest.
6-8j) How do we determine the number of years needed to accumulate a set
amount? - Answer✅✅By solving for n in the FV formula: FV = PV * (1+r)^n
6-8k) What is the FVA Factor formula? - Answer✅✅[(1+r)^n - 1] / r
6-8l) What is the PVA Factor formula? - Answer✅✅{1 - [(1+r)^-n]} / r
9-14a) What are Quality-Assurance ("Standard Type") Warranties? -
Answer✅✅Obligations to repair/replace products that are defective upon delivery.
9-14b) What are Extended ("Service Type") Warranties? - Answer✅✅Provides
protections beyond the Quality Assurance Warranty.
9-14c) Are Quality-Assurance Warranties a performance obligation? -
Answer✅✅No. This warranty is considered a cost of performing the original
obligation of providing quality products.
9-14c) Are Extended Warranties a performance obligation? - Answer✅✅Yes. This
warranty is a performance obligation.
9-14d) When is a warranty an Extended Warranty? - Answer✅✅A) The customer
has the option to purchase the warranty separately.
B) The warranty goes beyond assuring the product/service was defect-free upon
delivery. (example, very long).
9-14e) When is revenue recognized for Quality-Assurance Warranties? -
Answer✅✅At the point of sale, because it is a performance obligation for the
original transaction.
9-14f) When is revenue recognized for Extended Warranties? - Answer✅✅Over
time throughout the coverage period, because it is its own performance obligation
for a prolonged amount of time.
9-14g) What is another name for Quality-Assurance Warranties? -
Answer✅✅Another name for it is Standard-Type Warranties.
9-14h) What is another name for Extended Warranties? - Answer✅✅Another name
for it is Service-Type Warranties.
9-14i) What are bundled goods/services? - Answer✅✅When the customer has the
option to include additional goods/services at a discounted/included price.
