When Using the Formula PV = K/(1+i)^t to Calculate the Present

question 102

Multiple Choice

When using the formula PV = K/(1+i) ^t to calculate the present value of a future payment, a higher K implies:

• A) a lower interest rate.
• B) a higher interest rate.
• C) a higher present value.
• D) a lower present value.

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Definitions:

Assurance of Performance

A guarantee or promise that certain conditions will be met or certain results will be achieved in a contractual agreement.

Repudiated

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a legal principle that requires sellers to deliver goods to buyers exactly as specified in their contract, without any deviations.