Process of calculating future value of money from present value is classified as____________?
Correct answer: A. Compounding
- A. Compounding
- B. Discounting
- C. Money value
- D. Stock value
Explanation
Compounding moves a present amount forward by applying interest over successive periods, producing its future value. Discounting works in the reverse direction by converting a future amount into present value.
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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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