BUSI 408 Final Exam – Unit 4 Key Terms Study Guide

BUSI 408 Final Exam: Unit 4 Terms
Stream of cash flows
Annuity
- Growing

Same as ordinary annuity, but cash flows come at the beginning of
Annuity due
the period




Compounding Additive

Discounting Reductive

Stream of cash flows that grows at a constant rate at a fixed
Growing annuity
number of periods

Growing perpetuity Stream of cash flows that grows at a constant rate forever

Ordinary annuity Stream of constant cash flows that lasts for fixed number of period

Constant stream of cash flows that lasts forever


Perpetuity EITHER
- Static
- Growing

Money changes value depending on time


- Present value of single sum
TVM (Time Value of Money)
- Future value of single sum
- Present value of annuity
- Future value of annuity