If the Discount (Or Interest) Rate Is Positive, the Future

question 122

True/False

If the discount (or interest) rate is positive, the future value of an expected series of payments will always exceed the present value of the same series.

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Definitions:

Residual Value

The projected sum an asset will fetch at the time of sale, once it has surpassed its lifespan.

Straight-Line Method

A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.

Depreciation Expense

An accounting method to allocate the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.

Residual Value

The estimated value of an asset at the end of its useful life.