Identify the Correct Statement About Present Value in the Calculation

question 31

Multiple Choice

Identify the correct statement about present value in the calculation of the economic value of life.

• A)Because the timing of the death cannot be predicted, it is common to calculate the annuity value of the income stream to derive at a single number that is used for the calculation of present value.
• B)The use of the present value concept is impractical because it gives us several figures for the estimated of the economic value of the person.
• C)The importance of the present value technique lies in its use as a tool for planning the needed financial protection against the case of a premature death.
• D)Discounting in the present value method makes the distant future cash flows more significant.
• E)The present value of a future stream of earnings is independent of interest rates and time.