In time value of money, periodic rate is_________?
Correct answer: B. Shown on timeline
- A. Not shown on timeline
- B. Shown on timeline
- C. Multiplied on timeline
- D. Divided on timeline
Explanation
The periodic rate is placed on the timeline for each compounding or payment period, such as a monthly rate on a monthly timeline. It is not multiplied or divided on the timeline itself.
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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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