Which One of the Following Statements Correctly States a Relationship

question 19

Multiple Choice

Which one of the following statements correctly states a relationship?

• A)Time and future values are inversely related, all else held constant.
• B)Interest rates and time are positively related, all else held constant.
• C)An increase in the discount rate increases the present value, given positive rates.
• D)An increase in time increases the future value given a zero rate of interest.
• E)Time and present value are inversely related, all else held constant.

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Definitions:

Financing Cash Flows

This represents the cash flow movements that are associated with financing activities in a company, including transactions involving debt, equity, and dividends.

Investing Cash Flows

These are part of the cash flow statement, showing the cash spent on and generated from investment activities like buying physical assets or securities.

Investing Cash Flows

Cash inflows and outflows related to transactions involving the purchase and sale of long-term assets and investments.