You Plan to Analyze the Value of a Potential Investment

question 16

Multiple Choice

You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows.Which of the following would increase the calculated value of the investment?

• A) The cash flows are in the form of a deferred annuity,and they total to $100,000.You learn that the annuity lasts for 10 years rather than 5 years,hence that each payment is for $10,000 rather than for $20,000.
• B) The discount rate decreases.
• C) The riskiness of the investment's cash flows increases.
• D) The total amount of cash flows remains the same,but more of the cash flows are received in the later years and less are received in the earlier years.
• E) The discount rate increases.

---

Definitions:

Address

typically refers to the physical location or residence of a person or organization, or in digital terms, it can mean an electronic mail or website location.

No Electronic Theft Act

A U.S. law aimed at penalizing copyright infringement specifically involving digital material, without the necessity of proving financial gain or loss.

Copyright Infringement

The unauthorized use or reproduction of copyrighted material without the permission of the copyright holder.

Criminal Penalties

Sanctions or punishments imposed by law for the commission of criminal offenses, including fines and imprisonment.