The current worth of a claim on future resources is called:
A) net present value.
B) future value.
C) present discounted value.
D) internal rate of return.

Question

Quizplus · Accepted Answer

The current worth of a claim on future resources takes into account the time value of money and is calculated using present discounted value. Net present value also takes into account the time value of money, but is calculated by subtracting the initial investment from the sum of the present values of the expected cash flows. Future value simply calculates the value of an investment at a future point in time based on a specified interest rate. The internal rate of return calculates the rate at which an investment earns a net present value of zero.

The Current Worth of a Claim on Future Resources Is