A Lower Discount Rate Applied to a Given Flow of Returns

question 11

Multiple Choice

A lower discount rate applied to a given flow of returns in the future

• A) remain unchanged if the future dollars do not change.
• B) increase.
• C) decrease.
• D) change in a direction that cannot be determined in general.
• e.g., $5,000 at the end of 5 years, $10,000 at the end of 10 years, $15,000 at the end of 15 years, etc.) will cause the present value of that flow to:

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Definitions:

Fulfilling Job

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