Ask the NINJAs

Ask the NINJAs: Present Value Calculations for FAR


Dear NINJAs,

Do you now if time value of money is on the FAR exam?

If so, do they ask the very complex questions that I see in my review course? – Terri

 

 

Dear Terri,

Your CPA Review course may be over-doing it.

For the most part, the TVM calculations for FAR aren't as in-depth as they are for BEC, where topics like Capital Budgeting are tested.

For FAR, you will need to know the difference between two different cash flows using a table and pick the correct number.

An example from NINJA MCQ would be:

MCQ2

Make sure you know the difference between an Annuity Due and an Ordinary Annuity.

For example – with Lease Payments (from the NINJA Notes):

Annuity Due
o Payments begin at the start of the lease
o Think: Rent is Due at the first of the month

Ordinary Annuity
o Payments begin after the end of the first year
o Think: An annuity that pays you at end of year

 

 

-The NINJAs

Have a question for the NINJAs?

Send it here and Jeff will forward it to them via Carrier Pigeon.

Get more Ask the NINJAs

THE AUTHOR

jeff

RELATED POSTS

COMMENTS

Leave a comment

Your email address will not be published. Required fields are marked *


Would You Hate It If I Gave You $162.12 Of Free CPA Review Material That Will Help You…

1) Study Less

2) Avoid Common CPA Candidate Mistakes

3) Get Higher Scores

4) Spend More Time with Friends and Family

5) Finally Pass and Get On With Your Life?