Which One of the Following Will Increase the Present Value

question 28

Multiple Choice

Which one of the following will increase the present value of an annuity?

• A)lowering the discount rate
• B)reducing the cash flow amount
• C)decreasing the number of payments
• D)reducing the future value of the cash flow
• E)lowering the payment amount

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Definitions:

Marginal Revenue

The additional income gained from selling one more unit of a product or service, crucial in determining the optimal level of output for a company.

Marginal Cost

The extra expense associated with manufacturing an additional unit of a product or service.

Oligopolistic Firm

A company operating in an oligopoly market structure, characterized by a few firms dominating the market, leading to specific behaviors like pricing collusion or competition.

Price Charge

The amount of money demanded by a seller for a product or service, essentially the cost to the buyer.