As the number of periods increases for a project having uniform cash flows, the present value of each future discounted cash flow becomes:
A) Smaller
B) Does not change
C) Irrelevant
D) Larger

Question

Quizplus · Accepted Answer

As the number of periods increases, the present value of each future discounted cash flow becomes smaller due to the effect of time value of money. This means that the discount rate used to calculate the present value increases with time, leading to a decrease in the present value of each future cash flow.

As the Number of Periods Increases for a Project Having