The present value of a single future sum
A) increases as the number of discount periods increases.
B) is generally larger than the future sum.
C) depends upon the number of discount periods.
D) increases as the discount rate increases.

Question

Quizplus · Accepted Answer

The present value of a single future sum depends upon the number of discount periods, as well as the discount rate. The longer the time period until the future sum is received, the lower the present value. Conversely, the higher the discount rate, the lower the present value. Option A and B are incorrect statements.

The Present Value of a Single Future Sum