As the Interest Rate Decreases,the Present Value of an Amount

question 98

Multiple Choice

As the interest rate decreases,the present value of an amount to be received at the end of a fixed period:

• A) increases.
• B) decreases.
• C) remains the same.
• D) not enough information to tell.

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Definitions:

Deposits In Transit

Funds that have been deposited by a company but not yet credited to its bank account.

NSF Check

A check that has been declined by a bank due to insufficient funds in the account it was drawn on.

Adjusted Cash Balance

The cash amount reflected in the accounting records after adjustments for items like outstanding checks and deposits-in-transit.

Deposits In Transit

Funds that have been sent to a bank but not yet recorded by the bank in the account holder's bank statement.