The present value of a single sum
A)increases as the discount rate decreases.
B)decreases as the discount rate decreases.
C)increases as the number of discounting periods increases.
D)increases as the discount rate increases.
E)none of the above.

Question

Quizplus · Accepted Answer

The present value of a single sum increases as the discount rate decreases because the future cash flow is discounted less, resulting in a higher present value.

The Present Value of a Single Sum