Explain Intuitively Why It Is That Present Values Decrease as the Discount

question 71

Essay

Explain intuitively why it is that present values decrease as the discount rate increases.

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Definitions:

Dry Judgment

A court judgement that orders a payment or entitlement without specifying the means of achieving it or fails to award the plaintiff any compensatory damages.

Garnishment Process

A legal procedure by which a creditor can collect what a debtor owes by requiring a third party to turn over the debtor's wages or property.

Limitations

Restrictions or time limits within which legal action must be initiated or rights enforced to prevent stale claims.

Counterclaim

A claim made by a defendant in opposition to, or as a retaliation against, the plaintiff's claim in a lawsuit.