A higher discount rate means that future dollars are ____ in comparison to current dollars.
A) discounted less
B) discounted more
C) amortized more
D) amortized less

Question

Quizplus · Accepted Answer

A higher discount rate means that future dollars are discounted more in comparison to current dollars. This is because a higher discount rate implies a higher opportunity cost of not using that money in some other investment or activity that generates a higher return. Therefore, the present value of future dollars is lower when discounted at a higher rate.

A Higher Discount Rate Means That Future Dollars Are ____