The Present Value of a Future Sum Decreases as Either

question 82

True/False

The present value of a future sum decreases as either the discount rate or the number of periods per year increases, other things held constant.

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Definitions:

Lump Sum

A significant amount of money paid all at once, as opposed to smaller payments or installments over time.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent or salaries.

Average Total Costs

The total expenses incurred in the process of producing or offering a good or service, divided by the quantity of goods or services produced or offered.

Average Variable Costs

The sum of all variable production costs divided by the total number of units produced.