All Else Being the Same, Which of the Following Statements

question 186

Multiple Choice

All else being the same, which of the following statements is correct?

• A) Present values increase as the discount rate increases I only.
• B) Present values decrease as the discount rate decreases.
• C) Present values increase the further away in time the future value.
• D) Present values are always smaller than future values when both r and t are positive.
• E) Present values are always smaller than future values when r is negative and t positive.

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Definitions:

Administrative Expenses

These are costs related to the general operation of a business that are not directly tied to producing goods or services.

Selling Expenses

Costs associated with the marketing and selling of products or services, including advertising and sales commissions.

Special Journals

Journals designed to be used for recording a single type of transaction.

General Journal

A bookkeeping ledger that records each transaction of a company in chronological order.