In estimating value of cash flows, the compounded future value is classified as its _________?
Correct answer: A. terminal value
- A. terminal value
- B. existed value
- C. quit value
- D. relative value
Explanation
The compounded value of a project's cash flows at the end of its life is called its terminal value. It represents the value accumulated at the final point of the investment period.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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