In the Context of Discounted Present Value, Under What Conditions

question 19

Multiple Choice

In the context of discounted present value, under what conditions can the sum of the income earned in each period divided by the discounting factor be replaced by the payment divided by the rate of interest?

• A) When the stream of payments is collected over a long period of time
• B) When the costs of obtaining the education are zero
• C) When the interest rate is high
• D) When the payments are variable over time

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