As the time period until receipt increases, the present value
A) decreases.
B) remains the same.
C) increases.
D) Not enough information is given to tell.

Name: As the time period until receipt increases, the present value A) decreases. B) remains the same. C) increases. D) Not enough information is given to tell.
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Question

Quizplus · Accepted Answer

The longer the time period until receipt, the more discounting is applied to future cash flows, reducing their present value. Therefore, the present value decreases.

As the Time Period Until Receipt Increases, the Present Value