If interest rates are positive, which of the following has the highest current value
A) $350 a year from now.
B) $350 now.
C) $350 two years from now.
D) All of the above have the same current value.

Question

Quizplus · Accepted Answer

If interest rates are positive, the present value of future cash flows will always be less than their face value. Therefore, the option with the highest present value is the one that gives you cash now, which means option B is the best choice.

If Interest Rates Are Positive, Which of the Following Has