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4 cards from this section. Quick, good the night before a test.
What does a cash flow diagram represent?
Think about how money moves in and out.
Name the factor used to calculate future value.
It's related to growing an initial sum over time.
What is the primary purpose of a cash flow diagram?
It graphically represents cash movements.
True or False: The time value of money means money today is worth less than the same amount in the future.
Think about interest and earning potential.
Calculate the amount you would need to save every year at a 5% interest rate to afford a $150,000 equipment purchase in 10 years.
Consider the future value of money and how it grows over time.
A company invests $50,000 in a fund earning 4% interest. What will be its value in 15 years?
Remember to apply the compound interest formula.
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