You Plan to Analyze the Value of a Potential Investment

question 149

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 lower the calculated value of the investment?

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

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Definitions:

XIC Instruction

In ladder logic and PLC programming, the "Examine if Closed" instruction that checks if a particular condition is true (i.e., if a contact is closed).

True

A logical or Boolean value indicating affirmative or confirmation, often represented digitally as '1' in binary.

Pressure Switch

A device that closes or opens an electrical contact when a certain set fluid pressure has been reached on its input.

Selector Switch

A switch used to select between two or more different operations or circuits.