The Present Value of a Future Payment Is Higher the Longer

question 47

True/False

The present value of a future payment is higher the longer the period of time until the payment, .

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Definitions:

Fair Value

An estimate of the market value of an asset or liability, based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

Equity Method

An accounting technique used to record investments in associate companies, reflecting the investor’s share of the investee’s profit or loss.

Stock Investments Account

An account that records the purchase price and subsequent value of stock investments owned by an individual or a company.

Dividends

Money given out to shareholders by a business, often coming from the profits made by the company.