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ss7ja [257]
2 years ago
7

the present value of a future sum decreases as either the discount rate or the number of periods per year increases, other thing

s held constant.
Business
1 answer:
Katena32 [7]2 years ago
4 0

The statement is true. The present value of a future sum decreases as either the discount rate or the number of periods per year increases, other things held constant.

Future cash flows are reduced by the discount rate, so the higher the cut price fee the lower the existing fee of the destiny coins flows. A lower discount rate leads to a higher present value. As this implies, whilst the discount price is better, cash in the future will be worth less than it's far nowadays.

Preserving other factors steady, as the interest price will increase, the present cost of an quantity to be received at the end of a fixed duration decreases. This means at a higher hobby price the present value of a future cash float falls. Decrease the prevailing price is. inversely related. growing the discount price decreases the present price and vise versa. Future value of that investment.

The prevailing value of a destiny lump sum decreases as the discount fee used decreases, All else held constant. the present cost and discount rate are inversely associated. If the destiny cost and the range of periods are held steady the prevailing price will lower as the cut price rate increases.

Learn more about The present value here:-

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For the following transaction, determine whether cash flows from operating activities will increase, decrease, or remain the sam
grandymaker [24]

In case collected cash from a customer is for services that will be performed in the next accounting period the cash flow from operating activities will increase.

The cash flow from operating activities will increase cash flow in the period of receipt itself as it will result in an increase in the cash balance of the organization  In case collected cash from a customer is for services that will be performed in the next accounting period.

If the balance of an asset will increase, cash float from operations will be lower. If the stability of an asset decreases, cash flow from operations will boom. If the balance of liability will increase, cash flows with the flow from operations will grow. If the balance of a liability decreases, cash flows with the flow from operations will decrease.

An accounting period, in bookkeeping, is the length with reference to which control accounts and economic statements are organized. In management accounting, the accounting length varies extensively and is decided with the aid of management. monthly accounting durations are common.

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8 0
2 years ago
She never drink change into how often​
oksano4ka [1.4K]
Nmskkkqkokswkkijnw!!!! Yes
8 0
3 years ago
Read 2 more answers
A firm sells 1000 units per week. It charges $15 per unit, the average variable costs are $10, and the average costs are $25. In
erik [133]

Answer:

b. ​Continue operating as the firm is covering all the variable costs and some of the fixed costs

Explanation:

A firm should shutdown operations if its price is less than average variable cost.

The price the firm sells is $15

Average variable cost is $10.

Price is greater than average variable cost in excess of $5.

The $5 covers some of the average fixed cost.

I hope my answer helps you

7 0
3 years ago
Assume a major investment service has just given Oasis Electronics its highest investment rating, along with a strong buy recomm
ruslelena [56]

Answer:

Share price : $ 56.23

Explanation:

CAPM

Ke= r_f + \beta (r_m-r_f)

risk free = 0.05

market rate = 0.11

premium market = (market rate - risk free) 0.06

beta(non diversifiable risk) = 1.64

Ke= 0.05 + 1.64 (0.06)

Ke 0.14840

Now, we solve for the present value of the future dividends:

year   dividend*     present value**

1  2.91                 2.53

2  3.31                 2.51

3  3.78         2.49

4  4.31                 2.48

4   80.38          46.22

TOTAL            56.23

*Dividends will be calculate as the previous year dividends tiems the grow rate

during the first four year is 14%

then, we calcualte the present value of all the future dividends growing at 9% using the dividend grow model:

\frac{D_1}{K_e-g}

(4.31 x 1.09) / (0.1484 - 0.09) = 80.38

Then we discount eahc using the present value of a lump sum:

\frac{Cashflow}{(1 + rate)^{time} } = PV

We discount using the CAPM COst of Capital of 14.84%

last we add them all to get the share price: $ 56.23

4 0
3 years ago
Assume that the risk-free rate of interest is 5% and the expected rate of return on the market is 17%. A stock has an expected r
crimeas [40]

Answer:  ER(P) = Rf + β(Rm-Rf)

                 6      = 5 + β(17-5)

                 6      = 5 + β(12 )

            6 - 5     = 12β

                1        = 12β

                 β       =  1/12

                 β       = 0.083

Explanation: In determining the Beta of the stock, we need to apply capital asset pricing formula and then make Beta the subject of the  formula. Other variables will be substituted with the exception of Beta, which becomes the subject of the formula.                                                                                          

6 0
3 years ago
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