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Future Worth Analysis

This quiz covers the concept of Future Worth Analysis, a method used in engineering economics to determine the future value of a series of cash flows.

8 Questions Published
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Questions

Question 1 Multiple Choice (Single Answer)

What is the formula for calculating the future worth of a single cash flow?

  1. FW = PV * (1 + i)^n
  2. FW = PV / (1 + i)^n
  3. FW = PV * (1 - i)^n
  4. FW = PV / (1 - i)^n
Question 2 Multiple Choice (Single Answer)

What is the formula for calculating the future worth of a series of cash flows?

  1. FW = PV * (1 + i)^n
  2. FW = PV / (1 + i)^n
  3. FW = PV * (1 - i)^n
  4. FW = PV / (1 - i)^n
Question 3 Multiple Choice (Single Answer)

What is the difference between future worth and present worth?

  1. Future worth is the value of a cash flow at a future date, while present worth is the value of a cash flow today.
  2. Future worth is the value of a cash flow today, while present worth is the value of a cash flow at a future date.
  3. Future worth and present worth are the same thing.
  4. Future worth and present worth are not related.
Question 4 Multiple Choice (Single Answer)

What is the effect of interest rate on future worth?

  1. Future worth increases as interest rate increases.
  2. Future worth decreases as interest rate increases.
  3. Future worth is not affected by interest rate.
  4. Future worth is inversely proportional to interest rate.
Question 5 Multiple Choice (Single Answer)

What is the effect of number of years on future worth?

  1. Future worth increases as number of years increases.
  2. Future worth decreases as number of years increases.
  3. Future worth is not affected by number of years.
  4. Future worth is inversely proportional to number of years.
Question 6 Multiple Choice (Single Answer)

What is the formula for calculating the future worth of an annuity?

  1. FW = PV * (1 + i)^n
  2. FW = PV / (1 + i)^n
  3. FW = PV * (1 - i)^n
  4. FW = PV / (1 - i)^n
Question 7 Multiple Choice (Single Answer)

What is the formula for calculating the future worth of a perpetuity?

  1. FW = PV * (1 + i)^n
  2. FW = PV / (1 + i)^n
  3. FW = PV * (1 - i)^n
  4. FW = PV / (1 - i)^n
Question 8 Multiple Choice (Single Answer)

What is the relationship between future worth and present worth?

  1. Future worth is always greater than present worth.
  2. Future worth is always less than present worth.
  3. Future worth is equal to present worth.
  4. Future worth and present worth are not related.
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