Module+18000+XI+Vocabulary

XI. Module 18000 Vocabulary rrw

**Vocabulary **

**(alphabetical listing) **


 * __Annuity __** – A series of future cash flows.


 * __Compound Interest __** – Interest that is earned on the principal and the interest earned in previous periods.


 * __Discounting __** – Computing the present value of future cash flows is called discounting.


 * __Discount Rate __** – Interest rate used to discount future cash flows.


 * __Future Value __** – The present investment will grow to a future value at the end of the investment’s life.


 * __Formula __** – Equation or a set of instructions that solves a certain type of problem in a prescribed manner. In a formula, the same set of inputs always produces the same output(s).


 * __Net Present Value __**<span style="font-family: 'Times New Roman','serif'; font-size: 18.6667px;"> - The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project.


 * __<span style="font-family: 'Times New Roman','serif'; font-size: 18.6667px;">Present Value __**<span style="font-family: 'Times New Roman','serif'; font-size: 18.6667px;"> – The amount on hand today that will be invested to produce some given future value.


 * __<span style="font-family: 'Times New Roman','serif'; font-size: 18.6667px;">Simple Interest __**<span style="font-family: 'Times New Roman','serif'; font-size: 18.6667px;"> – Simple interest is calculated only on the beginning principal.


 * __<span style="font-family: 'Times New Roman','serif'; font-size: 18.6667px;">Spreadsheet __**<span style="font-family: 'Times New Roman','serif'; font-size: 18.6667px;"> - A spreadsheet is a document that stores data in a grid of horizontal rows and vertical columns. Individual row/column locations, such as C3 or B12, are referred to as cells. The row/column structure also allows the data to be analyzed using formulas and calculations. The most commonly used spreadsheet application is Microsoft Excel, but several other spreadsheet programs are available.


 * __<span style="color: #000000; font-family: 'Times New Roman','serif'; font-size: 18.6667px;">Time Value of Money __**<span style="color: #000000; font-family: 'Times New Roman','serif'; font-size: 18.6667px;"> (also, **__Present Discounted Value__**) – Due to its potential earning capacity, money available today is worth more than the same amount in the future.

<span style="font-family: 'Times New Roman','serif'; font-size: 16px;">References: <span style="font-family: 'Times New Roman','serif'; font-size: 16px;">[] <span style="font-family: 'Times New Roman',Times,serif;">[] <span style="font-family: 'Times New Roman',Times,serif;">[] <span style="font-family: 'Times New Roman',Times,serif;">[] <span style="font-family: 'Times New Roman',Times,serif; font-size: 16px;">[] <span style="font-family: 'Times New Roman',Times,serif;">[] <span style="font-family: 'Times New Roman',Times,serif;">[] <span style="font-family: 'Times New Roman','serif'; font-size: 16px;">Hansen, D.R. & Mowen, M.M. (2011). //Cornerstones of Cost Accounting//. Mason, OH: South-Western Cengage Learning.