Question

The present value of a single future sum a. increases as the discount rate increases. b. depends upon the number of discount periods. c. is generally larger than the future sum. d. increases as the number of discount periods increases.

Answer 1

the correct answer is c. is generally larger than the future sum.

Step-by-step explanation:

this is mainly because of the time value of the money. As general price levels increase over time, which we call the inflation, the purchasing power of money goes lower and because of this, the value of the present sum is greater than the future of the same sum.

Answer 2

The present value of a single future sum

increases as the number of discount periods increases.

Step-by-step explanation: