Financial Management - Study Mode
[#581] Rate of return that an investment provides its investor is classified as
Correct Answer
(B) internal rate of return
Explanation
Solution: Rate of return that an investment provides its investor is classified as internal rate of return. The internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
[#582] Method of inventory recording gives lower cost of goods sold in income statement is classified as
Correct Answer
(D) First in first out
Explanation
Solution: Method of inventory recording gives lower cost of goods sold in income statement is classified as First in first out. First in, first out (FIFO) is an asset-management and valuation method in which the assets produced or acquired first are sold, used or disposed of first and may be used by an individual or a corporation.
[#583] Type of interest rates consist of
Correct Answer
(D) all of above
Explanation
Solution: Type of interest rates consist of nominal rates, periodic rates and effective annual rates.
[#584] An interest rate which is paid by money borrower and charged by lender is considered as
Correct Answer
(B) periodic rate
Explanation
Solution: An interest rate which is paid by money borrower and charged by lender is considered as periodic rate. A periodic interest rate can be charged on a loan or realized on an investment over a specific period of time.
[#585] In calculation of time value of money, 'PMT' represents
Correct Answer
(B) payment
Explanation
Solution: In calculation of time value of money, 'PMT' represents payment.