The amount of the present value of a future cash receipt will depend upon:
A) The length of time until the money is received.
B) The amount of money to be received.
C) The required rate of return.
D) The amount of money to be received, the length of time until the money is received, and the required rate of return.

Question

Quizplus · Accepted Answer

The present value of a future cash receipt is affected by all three factors: the amount of money to be received, the length of time until the money is received, and the required rate of return. The longer the time until the money is received, the lower the present value, and the higher the required rate of return, the lower the present value.

The Amount of the Present Value of a Future Cash