Econ Sample Test Question

[mikeczyz]

I also say it's PV.

[Esection]

this question is uber stupid.

present value is basically that a dollar today is worth more than a dollar 1 year from now (or any amount of time in the future). to get what a dollar a year from now would equal, one has to discount the cashflow back over time by some interest rate (or discount rate).

the question is dumb because present value and future value are very closely related. different finance questions may ask you the future value of a dollar given to you today, or the present value of a dollar given to you a year from now.

this question isnt really that clear, but given its wording i would have to say the answer is present value.

[mr_whomp]

Present Value of Future Cashflow = Future Cash Flow / (1 + Interest Rate)^N years

(for lump sum payments)

Intro to Financial Accounting FTW!

[death_blooms]

- Present Value

[ItalianFX]

Ok, well, this question wasn't even on the test. He did have a similar question, but the answer was "discounting."

Overall, the test was easier than I expected.

[SuperUberBob]

[ QUOTE ]
It is definitely present value.

[/ QUOTE ]

[DG_Knight]

Present value is the best answer out of those provided, but I think "time value of money" is the most appropriate.

[DcifrThs]

the answer as phrased is present value, imo.

problem with the question is the same concept is used to calculate future value...it would just be phrased in a minorly different way.

Barron

[Karak567]

im an econ major

it's present value

[ItalianFX]

Well I took the test last thursday. I "should" be getting my grade tomorrow (tuesday). I'll let everyone know how I did.

BTW, incase it wasn't noticed, that question wasn't even on the test.