The present value of future cash flows: a. increases as the discount rate decreases. b. decreases as the discount rate decreases
. c. decreases as the number of discounting periods decrease. d. increases as the number of discounting periods increase.
1 answer:
Answer:a
Explanation:
The Present value of cash Flow increases as the discount rate decreases as there is an inverse relation with discount rate.
Mathematically,
Where
PV=Present value
CF=cash Flow
r=discount rate
t=time
as r decreases PV increases
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