Which of the following discount rates will produce the smallest present value?

Name: Which of the following discount rates will produce the smallest present value?
Brand: Quizplus
Rating: 4.9 (57 reviews)

Question

Quizplus · Accepted Answer

The discount rate is the rate at which future cash flows are discounted to their present value. The higher the discount rate, the lower the present value. Therefore, the discount rate of 10% will produce the smallest present value. The other answer choices are higher or lower than 10%, so they will result in a higher present value.

Which of the Following Discount Rates Will Produce the Smallest