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Viefleur [7K]
3 years ago
14

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.
Social Studies
1 answer:
KengaRu [80]3 years ago
3 0

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,

PV=\frac{CF}{\left ( 1+r\right )^t}

Where

PV=Present value

CF=cash Flow

r=discount rate

t=time

as r decreases PV increases

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