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:

Sector

A section of a hard drive platter, wedge-shaped from the center of the platter to the edge.

File Compression

File compression is the process of using algorithms to reduce the size of files and folders, making them easier to store and share.

Redundancies

Elements or systems that are duplicated and can function as backups to prevent failure in the primary system.

Utility

Software designed to help analyze, configure, optimize, or maintain a computer, network, or any other software/hardware performance.