A company wants to find the yield on an investment that requires a certain amount today in which then returns a single amount some time in the future. Which time value of money table would the company use?
A) the present value of $1 or the future value of $1.
B) the future value of an annuity of $1.
C) present value of an annuity of $1.
D) None of these are correct.

Question

Quizplus · Accepted Answer

The present value of $1 or the future value of $1 tables are used to calculate the yield on an investment that involves a lump sum amount. These tables help in determining the present value of the required investment and the future value of the expected returns, which can be used to calculate the yield. The other options, such as the future value of an annuity or present value of an annuity tables, are used to calculate the yield on an investment that involves equal payments over a period of time.

A Company Wants to Find the Yield on an Investment