Present value: A)translates future costs or benefits into the equivalent amount of cash in hand today. B)enables us to compare the future amounts directly with the immediate amounts. C)is the future value divided by (1 + r)ⁿ where r is the interest rate and n is the number of years in the future at which the balance is received. D)All of these statements are true.

Question

Quizplus · Accepted Answer

All the statements accurately describe aspects of present value: it translates future amounts to present terms, allows comparison with immediate amounts, and is calculated using the given formula.

Present Value