Suppose an investment has cash inflows of R dollars at the end of each year for two years.What will be the present value of these cash inflows using a 12% discount rate?
A) Greater than under a 10% discount rate.
B) Less than under a 10% discount rate.
C) Equal to that under a 10% discount rate.
D) Sometimes greater than under a 10% discount rate and sometimes less; it depends on R.
Correct Answer:
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