Which One of the Following Will Increase the Present Value

question 390

Multiple Choice

Which one of the following will increase the present value of an annuity?

• A) Lowering the discount rate.
• B) Payment of annuity in the end instead of payment at the beginning.
• C) Increasing the number of payments.
• D) Reducing the future value of the cash flow.
• E) Lowering the payment amount.

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Definitions:

Potential Obligation

This term refers to a possible future liability that might arise as a result of past events or transactions, dependent on certain occurrences.